Press Release

JCR-VIS Assigns Initial Entity Ratings to Din Textile Mills Limited

Karachi, December 31, 2018: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned initial entity ratings of ‘BBB+’/A-2’ (Triple B Plus/A-Two) to Din Textile Mills Limited (DTML). The long term rating signifies adequate credit quality with reasonable protection factors. Risk factors are considered variable if changes occur in the economy. Short term rating of ‘A-2’ depicts good certainty of timely payment. Liquidity factors and company fundamentals are sound with good access to capital markets. Risk factors are small. Outlook on the assigned ratings is ‘Stable’.

Assigned ratings take into account sponsor profile of DTML; the company belongs to Din group which has been operating in the textile sector for over three decades. Principal activity of DTML includes production of yarn to primarily cater to the requirements of the local market. Ratings also reflect adequate business and financial risk profile along with sound corporate governance infrastructure.

Ratings also take into account moderate business risk profile due to volatility in cotton prices and currency exchange rates. Assessment of financial risk profile also incorporates adequate profitability indicators which improved on the back of higher local volumetric sales and average selling prices along with efficient cost management. Maintaining these performance indicators is considered important from a ratings’ perspective.

Liquidity profile of the company is considered adequate in view of satisfactory cash flows in relation to outstanding obligations. Moreover, equity base of the company has remained stable given variation in bottom line over the past few years. Given that management plans to mobilize lower debt in the coming years, leverage indicators are projected to remain within manageable levels.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Ms. Muniba Khan (Ext: 215) or at 021-35311861-71 or fax to 021-35311872-3.

Jamal Abbas Zaidi
Advisor

Applicable Rating Criteria: Industrial Corporates (May 2016)
http://www.jcrvis.com.pk/docs/Corporate-Methodology-201605.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 2018 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .