Lahore, August 31, 2018 (PPI-OT): The ratings reflect Maqbool Textile Mills Limited’s (the company) established track record and association with Maqbool Group, an established group with a presence in textile and seed oil extraction industry. Despite challenging textile industry dynamics, Maqbool Textile managed to maintain its optimal capacity while also expanding its asset base. The commoditized nature of spinning products keeps margins in check due to strong competition in local and international markets.
However, recently, the dynamics have changed favourably with rupee devaluation and better pricing of certain products. The company’s revenue and margins grew in line with better industry prospects. The margins remain on the lower side when compared with peers resulting in relatively subdued profitability. Maqbool Textile enhanced and revamped its production capacities to be more efficient. The financial profile of the company is constrained due to high leverage and adequate coverages. The debt structure is skewed towards short-term borrowings, which may lead to the asset-liability mismatch.
The ratings are dependent upon the management’s ability to improve margins, profitability and financial profile of the company. This includes avoiding any asset-liability mismatch that may arise and effectively manage risks to maintain its position in a competitive segment. Any deterioration in debt coverages leading to higher financial risk or subdued profitability will have a negative impact on ratings.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com