Press Release

VIS Reaffirms Entity Ratings of Shafi Lifestyle (Pvt.) Limited

Karachi, January 11, 2024: VIS Credit Rating Company Limited reaffirms entity ratings of Shafi Lifestyle (Pvt.) Limited (‘SLPL’ or ‘the Company’) at 'A-/A-2' (‘Single A minus’/ ‘A-Two’). Medium to long term rating of 'A' indicates 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 certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on December 30, 2022.

Shafi Lifestyle (Pvt.) Limited, established in 2009, specializes in the manufacture and sale of leather footwear. The Company has its registered office at Shafi House, Karachi, Sindh, and runs its production facility in Lahore, Punjab. The Company focuses on delivering leather footwear products mostly in the export markets.

Assigned ratings consider the long experience of the Company in fashion leather footwear export sector having a medium business risk profile. However, cyclicality risks arise from changes in consumer preferences tied to international economic and fashion trends. Moreover, the sector’s reliance on imported raw materials, such as sole material, exposes it to exchange rate fluctuations and potential challenges with import-related procedures.

Assigned ratings also consider the Company's financial profile, which includes topline growth driven by higher export volumes and increased prices due to PKR devaluation. Despite growth in top line, SLPL experienced a slight reduction in gross margins in FY23 as a result of escalating input costs. Net margins were further constrained by elevated finance costs resulting from local policy rate hikes. The Company's high client concentration risk, given long association, remains significant; however, conservative capitalization metrics, healthy coverages, and an adequate liquidity profile provide support to the assigned ratings.

Going forward, ratings will remain sensitive to SLPL’s ability to maintain its profitability, capitalization, liquidity and coverage profiles commensurate with assigned ratings.

For further information on this ratings announcement, please contact Mr. Saeb Muhammad Jafri (Ext: 202) or the undersigned (Ext: 201) at 021-35311861-64 or email at

Javed Callea

Applicable Rating Criteria:
Industrial Corporates
VIS Issue/Issuer Rating Scale

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