JCR-VIS Credit Rating Company reaffirms the Entity Ratings of Sapphire Textile Mills Limited

Karachi: The Japan Credit Rating-Vital Information Service Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Sapphire Textile Mills Limited (STML) at ‘A/A-2’ (Single A/A-Two). Outlook on the assigned ratings is ‘Stable’.

Given the rise in demand of textile products, particularly yarn, in the international markets, textile sector posted exceptional results in FY11. However, prices have fallen considerably since last quarter of the out-going financial year, imparting pressure on the sector. STML has also enjoyed favourable results in the last two years, though margins have come under pressure lately.

STML is the flagship company of the Sapphire group and also one of the lead players in the textile composite sector. Over the years, STML has built a sound capital structure. Given the adequate debt servicing coverage and future expected cash flow generation, the company is likely to maintain existing capital structure while undertaking the planned expansion.

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