Press Release

VIS Assigns Initial Ratings to Noor Fatima Fabrics (Private) Limited

Karachi, December 31, 2021: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB+/A-2’ (Triple B-Plus /A-Two) to Noor Fatima Fabrics (Private) Limited (NFFL). The medium to long-term rating of ‘BBB+’ denotes adequate credit quality coupled with reasonable protection factors. Moreover, risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned ratings is ‘Stable’.

NFFL is an exported-oriented textile unit which commenced commercial trade operations in 1997. The risk profile is supported by considerable experience of sponsors and established operating history. The business activities include pre-treatment & bleaching, dyeing, printing, cutting & stitching, wadding & quilting, and finishing. Product range in the made ups segment mainly comprises bed linen, curtains and quilts. In the recent years, the company has also started manufacturing and export of garments in knitwear segment. The ratings incorporate gradual increase in revenue over the past three years, which is supported by uptrend in export prices and higher processing volumes from the local customers. Revenue growth, however, has lagged behind over the review period and needs to be aligned with the peers. Moreover, the declining trend in margins needs to be arrested in order to improve overall profitability profile of the company.

The company’s liquidity position is considered sound. The company’s capacity to meet its financial obligations is considered adequate as reflected in satisfactory debt service coverage ratio. Going forward, the company intends to rationalize working capital cycle by reducing inventory levels. Meanwhile, leverage indictors are largely in line with the assigned ratings. Given no loan mobilization in the pipeline, gearing ratios are projected to improve by end-FY22 on account of profits retention.

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or email at info@vis.com.pk









Faryal Faheem Ahmed
Deputy CEO

VIS Entity Rating Criteria: Corporates (August 2021)
https://docs.vis.com.pk/docs/CorporateMethodology202108.pdf

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