Lahore, January 19, 2022 (PPI-OT):Tata Textile Mills Limited – a public listed company – primarily engaged in the manufacturing and sale of different varieties of yarn (siro yarns, Modal blend yarn, Tencil blend carded, slub yarn, spun yarns, plied carded and combed yarn and some other). During FY21, Company’s revenue improved to PKR 27.1bln (FY20: PKR 20.6bln); Sales have been done both in local and export market. Margins and net profitability enhanced recently where the Company recorded loss in FY20. In FY21, Company’s profitability stood at PKR 2.08bln. The company is expected to book robust profits in its first half of FY22. The trend is expected to continue in the near future, as per management projections.
The ratings of Tata Textile reflect the financial risk profile of the Company, which is characterized by moderate leveraging, good coverages and adequate working capital management. Long association of experienced and professional management team adds comfort. During the period July-December FY21-22, Pakistan textile exports surged 26% YoY, fielding $9.39 bln in total export remittances, as compared to $7.44 bln in the same period last year. This is attributable to increase in demand for textile products internationally and channeling of export orders towards Pakistani market. On a YoY basis, the exports of value-added textile items increased in both quantity and value in December 2021.
Going forward, the textile sector’s outlook is expected to stay positive in the medium term where the demand for textile products is expected to sustain. In the local market, the textile sector has recorded strong performance. The ratings are dependent on improving business margins while maintaining financial risk at a low level. Prudent management of short-term liquidity and sustained coverages are important.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com