Lahore, March 19, 2019 (PPI-OT): The ratings reflect adequate business profile of Maksons Textile (Private) Limited (the Company), depicted by its strong gross margins and adequate but stable net margins. The ratings incorporate adequate governance framework and experienced management team along with effective control environment. The country’s textile exports improved by ~9% in FY18 on the back of bailout package from the government and recent devaluation of rupee. This benefited the Company’s top line of which exports constitute 95%.
The Company caters to niche market in textile industry providing textile solutions in the form of semi-finished and finished fabrics; reflecting well in gross margins. The Company’s bottom line, though relatively small in size, has remained steady over the years. With planned BMR activities in the short-term, the Company is expected to bring efficiencies and growth, going forward. The company has a relatively stretched financial risk profile, characterized by high leveraging and adequate debt servicing ratio. The ratings account for financial strength of the Company’s sponsors – AL-Tariq Group – having strong presence in engineering and trading segments.
The ratings are dependent on rationalization of top ten client concentration, with anticipated growth in top line. Risk absorption capacity is expected to improve with scheduled repayments easing out leveraged capital structure. Maintaining adequate debt services coverage remains critical.
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