Karachi, December 31, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A-’/A-2’ (Single A Minus /A-Two) to Kamal Limited (KL). The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate 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’.
KL is involved in export of fabric, home textile, and garments and also local sales through retail outlets and institutional sales. Shareholding is mainly vested with the sponsoring family which is actively involved in the day to day affairs of the company. Capital expenditure incurred in the last two years has resulted in higher sales and improved efficiency for the company.
Moreover, KL’s strategy of keeping the proportion of value added products in the revenue mix above 75% positively impacted margins and profitability which is expected to be maintained, going forward. The company has a moderate financial risk profile emanating from strong coverages amid relatively high leverage indicators.
The ongoing capacity enhancement with the installation of a spinning unit, along with increase in the capacity of weaving and stitching units are expected to boost KL’s competiveness and sales, which, in turn, would positively impact the overall profitability and cash flow generation. The ratings are dependent upon maintenance of debt service coverage, and gearing ratios.
For more information, contact:
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk