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The Pakistan Credit Rating Agency Limited
Press Release

Date
22-May-19

Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of Sefam (Pvt.) Limited

Rating Type Entity
Current
(22-May-19 )
Previous
(20-Nov-18 )
Action Maintain Initial
Long Term A- A-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The ratings reflect Sefam (Pvt.) Limited’s reputable image as one of the leading players in the clothing/home textile retail industry with several established brands. The Company operates a complete range of clothing brands targeting all segments of the retail market. The major portion of the Company's raw material is sourced from group companies, which allows it to maintain profitability while ensuring quality. The Company has witnessed growth over the years amid positive industry dynamics and higher consumer spending. Margins continued to maintain an upward trend indicating efficient operations and improved profitability. Ratings draw strength from the Company’s strong financial profile, characterized by a low leveraged capital structure, strong coverages and efficient management of working capital.
The ratings are dependent on the Company’s ability to improve governance framework. Additionally, working capital management and ensuing borrowings should be monitored closely. Adverse movement in margins and/or coverages would be critical for the ratings.

About the Entity
Sefam (Private) Limited, incorporated in 1989, is part of the Sarena and Ali Group of Industries, most famous for its fashion brand Bareezé. The Company operates a total of 10 brands which cater to different segments of the market. Additionally, the Company sells high end foreign brands (Ralph Lauren & Giorgio Armani) through its wholly owned subsidiary, S-Luxe (Private) Limited. Moreover, the Company also operates 6 ‘The Entertainer’ franchises across the country.

Ownership of the company lies with the four children of Mr. J.A Zaman (late). Mr. Zaman founded Ali Embroidery Mills (Private) Limited in 1972, which later became the launching pad for Sarena & Ali Group of Industries. Mr. Hamid Zaman and Ms. Seema Aziz hold 42% of the Company, each. Meanwhile, Mr. Tariq Zaman and Ms. Ambreen Zaman hold the remaining 16% equally. Ms. Seema Aziz is the Managing Director of the Company whereas various brands are managed separately by dedicated teams.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.