VIS Assigns Initial Entity Ratings to Chakwal Textile Mills Limited

Karachi, June 19, 2019 (PPI-OT): VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB-’/A-2’ (Triple B Minus/A-Two) to Chakwal Textile Mills Limited (CTML). The medium to long-term rating of ‘BBB-’ denotes adequate credit quality coupled with reasonable and sufficient protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely repayment, sound liquidity factors and good company’s fundamentals. Outlook on the assigned ratings is ‘Stable’.

CTML is a spinning mill specialized in the production of polyester viscose yarn of different counts mainly for wash and wear fabric. The company generates almost 100% sales through local customers. Shareholding is mainly vested with the sponsoring family which is actively involved in the day to day affairs of the company. The company generated sales growth during last three years mainly through volumetric increase which impacted profits positively.

With installation of MVS machines during FY17, the company was able to increase capacity and hence started producing coarse counts PV yarn also. Trade receivables of the company continue to remain modest as yarn is mostly sold on a cash basis. The company retired all its borrowings by end-9MFY19. Liquidity indicators and coverages have remained adequate. The ratings are dependent upon sustained maintenance of overall financial indicators.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873