Press Release

VIS Maintains Entity Ratings of Indus Dyeing & Manufacturing Co Limited

Karachi, April 29, 2020: VIS Credit Rating Company Limited (VIS) has maintained entity ratings of Indus Dyeing & Manufacturing Co Limited (IDMCL) at ‘A+/A-1’ (Single A Plus/A-One). The assigned ratings have been placed on ‘Rating Watch-Developing’ status. Long term entity rating of ‘A+’ reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-1’ indicates high certainty of timely payment, liquidity factors are excellent and supported by good fundamental factors. Risk factors are minor. The previous rating action was announced on May 9, 2019.

IDMCL operates through three manufacturing facilities located in Karachi, Hyderabad and Muzaffargarh. The spinning segment operates through 178,896 spindles and has historically operated at high capacity utilization levels. During 2019, the company had planned to further expand its installed capacity through addition of new spindles alongside diversification in operations through investment in a 50MW wind power plant.

The revision in rating outlook reflects prevailing uncertainty in textile sector dynamics due to coronavirus outbreak, prolonged lockdown, overall contraction in demand and challenging economic environment. It is expected that the entire value chain of the textile industry will be impacted by these developments. Status of the assigned rating is therefore uncertain as an event of deviation from expected trend has occurred; additional information will be necessary to take any further rating action, warranting a ‘Rating Watch-Developing’ status. Given the low leveraged capital structure and sound financial profile, it is expected that ratings will remain stable post recovery of the ongoing situation; nevertheless as scenario is evolving rapidly, VIS will closely monitor and will accordingly take action to resolve the outlook status.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) or Ms. Muniba Abdullah, CFA (Ext. 215) at 021-35311861-70 or email at info@vis.com.pk .

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .