FLASHNEWS:

PACRA Assigns Initial Ratings to Nishat Mills Limited – PPSTS

Lahore, January 26, 2023 (PPI-OT):The ratings reflect the established position of Nishat Mills as a premier export-oriented composite unit, with a sizable strategic portfolio and conservative capital structure. The Company enjoys prominence in the textile sector due to the wide array of its products, extensive outreach, and stable customer base. Meanwhile, the Company’s revenues are consistently on a growing trajectory on account of both favourable rate and volume variance. Moreover, a factor of continuous BMR has assisted the Company in maintaining its leading position.

Although the Company remained moderately leveraged, its gearing increased from ~27.97% to ~34.68% at end of FY22 mainly due to an increase in short-term borrowing. Considering the hikes in exchange rates and supply side disruption due to recent flood devastation the company is going to issue the short-term Sukuk to manage its supply chain smoothly. The Company’s association with Nishat Group as its flagship entity remains a key rating factor.

Textile industry dynamics are proving to be vigorous mainly due to an increase in demand for textile products internationally and the channeling of export orders towards the Pakistani market. Export’s front witnessed a strong increase and is expected to stay positive in the medium term where the demand for textile products is expected to sustain. Meanwhile, the Company continues to receive sizable dividend income from its diversified investment portfolio which provides comfort to the ratings. The Company is expected to maintain its very strong financial profile.

The ratings are dependent upon the company’s ability to sustain its healthy business profile amidst strong competition, herein, effective and prudent management of financial risk indicators remains important. Moreover, upholding of governance framework is vital.

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