PACRA Maintains Entity Ratings of Latif Textile Mills (Private) Limited - Press Release issued by The Pakistan Credit Rating Agency Limited.

Lahore -- January 30, 2023 (PPI-OT)

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


The assigned ratings of Latif Textile reflect the adequate positioning of the Company in the relative universe. The Company is a manufacturer and exporter of Yarn and Towels, having both Open-end and Ring Spinning technologies for yarn and end-to-end weaving to stitching facilities for towels. The installed capacity is 20,160 spindles and 3,960 rotors along with 72 terry loom for towel weaving and 36 stitching machines. Furthermore, Latif Textile has established a weaving unit, a bleaching plant, and a stitching unit during the period under review.

Board comprises two members and both are from sponsoring families. The Company's management involves experienced professionals looking after the operations of the Company. During FY22, the Company's revenues stood at PKR 4,093mln (FY21: PKR 2,609mln). The sales mix, dominated by local sales, display stagnancy over the years. The Company enjoys an established customer base in the local market which drives the major revenue. During FY22, the Company also entered the export market and earned good revenues from exports.

Margins declined during the period under review due to an upsurge in financial charges (as a result of increased short-term borrowings), rising energy costs, and exchange rates. The financial risk matrix depicts that Company's leveraging increased due to an increase in total borrowings clocking in at PKR 1,061mln (FY21: PKR 900mln). The import of raw materials has become a challenge to manage, which is quite essential for the continuation of operations. Management of receivables is essential for the Company. The company is expected to adhere to conservative financial discipline, which would be crucial to...

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