Press Release

VIS Assign Initial Entity Ratings to Tauseef Enterprises (Pvt) Limited

Karachi, September 18, 2024: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Tauseef Enterprises (Pvt.) Limited (‘TEPL’ or ‘the Company’). Medium to long-term rating of ‘A-’ reflects good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-2’ indicates, good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings is ‘Stable’.

Established in 2006 with a registered office in Faisalabad, TEPL is engaged in the manufacturing and export of textile products. TEPL produces jogging suits, ladies’ undergarments, shirts, trousers, lycra leggings, capri shorts, pajama suits and knitted socks, for export mainly to UK, USA, Canada, Europe, and the Middle Eastern markets. TEPL is part of the Tauseef Group of Companies, headquartered in Faisalabad. The Group, founded in 1981, operates in the textile sector as a manufacturer and exporter of stitched garments and knitted socks. Over the years, the Group has diversified into textile manufacturing and exports through TEPL and is also involved in trading, import and export activities, real estate development under Tauseef Enterprises (Sole Proprietor), and hotel and tourism operations through Grand Regent Hotel & Suits (Pvt) Ltd.

Assigned ratings consider the business risk profile of the textile sector in Pakistan, characterized by significant exposure to economic cyclicality and intense competition. The sector's vulnerability to economic conditions poses inherent risks, impacting its stability and performance. This profile is reflected in the operational challenges and market dynamics experienced during the fiscal year.

Assigned ratings also take into account TEPL’s profitability, capitalization, liquidity, and coverage profiles. Company’s profitability is influenced by raw material cost and other production expenses affecting the profit margins. TEPL’s capitalization approach remains conservative, emphasizing use of internal cash generation for financing. The liquidity profile demonstrates stability, supported by a consistent cash conversion cycle and coverage ratios aligning with the sector norms.

Going forward, the key business and financial risk indicators which could impact the assigned ratings include Company’s reliance on cotton availability and cost, energy expenses, and global economic conditions. The ratings are sensitive to the maintenance of conservative capitalization and liquidity levels. Continued focus on these areas is crucial for sustaining the assigned ratings amidst potential market fluctuations and operational challenges.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.









Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .