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The Pakistan Credit Rating Agency Limited
Press Release

Date
31-Dec-21

Analyst
Iram Shahzadi
iram.shahzadi@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 the Entity Ratings of Kassim Textiles (Pvt.) Limited

Rating Type Entity
Current
(31-Dec-21)
Previous
(31-Dec-20)
Action Maintain Initial
Long Term A- A-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Kassim Textiles (Private) Limited (Kassim Textile) flagship company of Machiyara group enjoys long presence in textile and allied industry along with several other sectors. The Company operates 3,432 rotors and 350 looms. Revenue is mainly driven from the manufacturing and sale of yarn and fabric in addition to having a portfolio of strategic investments in its subsidiary Kassim (Private) Limited. Over the year the Company has managed to maintain its optimal capacity utilization while upgrading its machinery in order to ensure operational efficiencies and eventually higher production volumes. The company’s top line clocked in at PKR 15.7bln in FY21 (FY20: PKR 12.8bln); where 84% (FY20: 80%) vests with exports. Further analysis reveals major contribution of denim cloth to several destinations and enjoys stable customer base local (Karachi, Lahore) and exports (Turkey, Bangladesh, Cambodia, and Greece etc). The share of Fabric sales recorded sizable improvement to PKR 13.8bln (FY20: PKR 11.2bln). The profitability of the Company improved in FY21, due to an increase in the topline. Kassim Textile maintained their margins. While also continues to maintain a low leveraged capital structure and good coverages; which gives comfort to financial matrix. Going forward, The Company is planning to incur CAPEX to enhance its production capacity in both weaving and spinning segments. In both spinning and weaving segments. Major overhaul will enhance the production capacity along with efficiency where planned project will be financed through a mix of internal and external sources.
The ratings are dependent on sustaining business profile of the Company by maintaining profitability and margins achieved from core textile operations.

About the Entity
Kassim Textiles (Private) Limited was incorporated on August 27, 1991 as a private limited company. It is a modern weaving unit that manufactures Denim fabric used for local and branded garment industry. The Company belongs to a prominent business venture of Machiyara Group. Apart from Kassim Textiles, the Group has presence in textile, construction and real estate development, mobile phones, and trading etc.
Kassim Textile’s Board comprises four members, all are sponsors. The position of Chairman and CEO vests with Mr. Muhammad Shabbir. He belongs to the sponsoring family, possesses expertise in textile and has a future-oriented region for the Company. He is associated with the association for 3 decades. He is assisted by a professional and long associated management team.

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.