VIS reaffirms entity ratings of Sadaqat Limited

KARACHI: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Sadaqat Limited (SL) at single A /A-Two.

The medium to long-term rating of "A" denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy.

The short-term rating of "A-2" denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound.

The outlook on the assigned ratings is stable. The previous rating action was announced on February 23, 2018, said a press release on Friday. SL is one of the well-known value-added textile units operating from Faisalabad. SL is mainly involved in manufacturing and export of a wide range of home textile products and holds nearly 5% -7% market share of annual bed ware exports.

The assigned ratings take into consideration the experience of sponsoring family in the textile industry, growth in sales and profits, and further enhancement in production capabilities. Being primarily an export oriented company, recent rupee devaluation also bodes well for the profitability.

The ratings also take into account and would remain dependent upon adequate debt service coverage and liquidity profile as well as maintenance of gearing and debt leverage indicators.