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

Lahore -- May 17, 2021 (PPI-OT)

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

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The assigned ratings of AL Textile (Pvt.) Limited (AL Textile) reflects the adequate financial profile of Sponsors and their support to the entity. The Company mainly caters to the need of the local market and has developed brand-based clientele over the years. The Company's revenue and profitability witnessed improvement in 9MFY21. The relatively smaller capacity of AL Textile has limited its margins. Recently, the Company's margins and profitability have improved, leading to net profit.

The imposition of sales tax on local sales had a negative effect on local demand. The Company has a moderately leveraged capital structure characterized by good coverages and moderate inventory days. The financial matrix observed improvement after the conversion of the director's loan into equity. The ratings take comfort from the explicit commitment of sponsors to provide support to the Company.

The outlook of the Company is now 'stable' as the Company's performance rebounded along with improvement in leveraging. The Rating Watch signifies the prevailing uncertainty due to the ongoing challenges of the COVID-19...