VIS Reaffirms Entity Rating of Union Apparel (Private) Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- January 18, 2023 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

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VIS Credit Rating Company Limited (VIS) has reaffirmed the entity rating of Union Apparel (Private) Limited (UAPL) at 'A-/A-2' (Single A Minus/ A-Two). Long Term Rating of 'A-' reflects good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short Term Rating of 'A-2' signifies good certainty of timely payment, liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned rating is 'Stable'. Previous rating action was announced on December 07, 2021.

Setup in 2016, UAPL is a wholly-owned subsidiary of Union Fabrics (Private) Limited (UFPL), engaged in manufacture and sale of fabric to leading brands in the local market. Assigned rating incorporates moderate business risk profile of the Company wherein risk is related to demand in local market mainly. Single client concentration has witnessed improvement on a timeline basis, however the same is considered to be on the higher side. Rating draws comfort from long-term association of the parent company with reputed brands.

Assessment of financial risk profile reflects improvement in topline led by increased prices. Also, the Company also registered an export sales during FY22. However...