PACRA Assigns Initial Entity Ratings to Ali Embroidery Mills (Private) Limited - Press Release issued by The Pakistan Credit Rating Agency Limited.

Lahore -- January 23, 2023 (PPI-OT)

Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)

Quote

The ratings of Ali Embroidery Mills (Private) Limited (Ali Embroidery) reflect its sustained business profile. The Company is a family-owned private limited company which operates with 30 Schiffli and 108 Multi- Heads embroidery machines. The embroidery industry consists of several players operating on small scale with informal structures. However, Ali Embroidery has tiered organizational structure with good operating capacity. The ratings reflect sustained business profile over the years where recently an improvement has been recorded in revenues. During FY22, the company's topline reflected growth to PKR 1.2bln (FY21: PKR 959mln).

The company has witnessed an increasing trend of customer sales, majority of the revenues are generated from related parties, while the rest of the customer base has also contributed over the years. During the period, operating profit and PBIT margins have improved. Ratings also incorporate adequate financial risk manifested by suitable working capital and coverage. During FY22, Pakistan's textile exports surged to $19.3bln (recording a growth of 26%).

Exports grew owing to increased volumetric growth of (16% YoY) in the value-added segment, a steep rise in global demand, and record-high cotton prices. Under the...