Karachi, May 18, 2022 (PPI-OT):VIS Credit Rating Company Limited has upgraded the entity ratings of Rizwan Enterprises (RE) from ‘A-/A-2’ (A Minus/A-Two) to ‘A-/A-1’ (A Minus/A-One). Long Term Rating of ‘A-’ reflects good credit quality with adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-1’ signifies high certainty of timely payment, excellent liquidity factors, company fundamentals, and access to capital markets. Risk factors are minor. Outlook on the assigned ratings is ‘Stable’.
Rizwan Enterprises (RE) is a moderate-sized partnership concern engaged in weaving and sizing business with product portfolio ranging from greige fabrics, finished fabrics ROT, bedding, organic bedding, hospitality and healthcare fabrics and pocketing. Manufacturing facility is located in S.I.T.E Karachi. Production capacity increased during FY21 and 8MFY22 under planned capital expenditure.
Assigned ratings take note of the upward trend of the topline during FY21 and 9MFY22, which is expected to continue going forward, as the Company plans to further enhance production capacity as well as on-board new clients in untapped geographical markets. Ratings also incorporate favourable gross margins of the Company relative to peers, led by growing topline and higher operational efficiencies. Moreover, capitalization indicators have remained sound on a time line basis. While gearing and leverage recorded slight increase in FY21, they remain in line with assigned ratings.
Revision in short term rating takes into account strong liquidity profile of the Company. The Company has been able to maintain a strong current ratio over the years. Moreover, a stable cash conversion cycle as well as comfortable coverage short term borrowings through inventory and trade debts provides further stability to the liquidity profile. However, corporate structure and governance provides room for improvement. Going forward, growth in equity base along with maintenance of capitalization indicators while continuing to expand and augment revenues will remain important for ratings.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
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