Press Release

VIS Reaffirms Entity Ratings of Asher Imran Spinning Mills (Pvt.) Limited

Karachi, November 20, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Asher Imran Spinning Mills (Pvt.) Limited 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 Aug 18, 2022.

Asher Imran Spinning Mills (Private) Limited (AISML) is a yarn manufacturer and operates a spinning unit in Kasur, with a registered office in Lahore's Industrial Estate. Assigned rating draws support from its sponsors, Comfort Knitwears (Private) Limited (‘CKPL’) which has over three decades of operational experience, specializing in dyed yarn and offers a wide range of knitted garments. Moreover, the Company is part of the 'Comfort Group', which has a diversified presence across various sectors including textile, pharmaceutical and transportation businesses. Overall group’s established track record provides operational, managerial, and financial support to AISML.

Assigned ratings also consider the business risk profile of the industry, which is characterized by cyclical economic factors and competition. In FY23, the sector faced significant headwinds due to damaged cotton crops, inflation, and foreign exchange constraints, leading to a decline in yarn production and profitability. Going forward, global outlook for cotton production is expected to slightly recover. Nevertheless, local challenges persist which includes high interest rates, increasing energy costs, and difficulties obtaining letters of credit (LCs). These factors are likely to result in continued sluggish performance for the spinning sector in FY24.

Ratings also incorporate sustained gross and operating margins despite contraction in topline amid slowdown in demand as the Company was able to pass on the higher costs to its customers. However, net margins were adversely impacted due to elevated finance costs resulting from an increase in the policy rate and higher short-term debt drawdown. The Company's capitalization profile showed slight deterioration with higher leverage and gearing ratios. Management plans to address this by improving the cash conversion cycle, reducing short-term debt utilization, and maintaining capitalization benchmarks in line with assigned ratings. Liquidity and coverage profiles also weakened due to widening working capital gap and increased financial burden, with a decline in funds from operations (FFO) and thus contraction of debt servicing coverage ratio (DSCR).
Going forward, ratings will remain sensitive to the Company’s ability to achieve its projected plans as well as improvement in its liquidity and coverage profile. Moreover, maintenance of the capitalization profile commensurate of assigned ratings will also be a key consideration.
For further information on this ratings announcement, please contact Saeb Muhammad Jafri at 021-35311861-64 (Ext. 202) and/or the undersigned at 021-35311861-64 (Ext. 207) or email at

Sara Ahmed

Applicable Rating Criteria: Corporates (May 2023):

VIS Issue/Issuer Rating Scale

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