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The Pakistan Credit Rating Agency Limited
Press Release

Date
31-Dec-20

Analyst
Sehar Fatima
sehar.fatima@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Initial Entity Ratings to Kassim Textiles (Pvt.) Limited

Rating Type Entity
Current
(31-Dec-20)
Action Initial
Long Term A-
Short Term A2
Outlook Stable
Rating Watch -

Kassim Textiles (Private) Limited (Kassim Textile) flagship company of Machiyara group enjoys long presence in textile and allied industry along with several other sectors. Kassim Textile mainly derives its revenue from the manufacturing and sale of yarn and fabric in addition to having a portfolio of strategic investments in its subsidiary Kassim (Private) Limited. Kassim Textile has managed to maintain its optimal capacity utilization while upgrading its machinery in order to ensure operational efficiencies and eventually higher production volumes. The company’s top line clocked in at PKR 12.8bln in FY20 (FY19: PKR 13.6bln); where 80% vests with exports. Further analysis reveals major contribution of denim cloth in exports. During FY20, Company’s gross, operating and net margins also witnessed marginal decline. Kassim textile managed to hold the grounds amid the pandemic and resultant lockdowns and revenue figure were in line with previous year. It was primarily due to Company’s focus on exports which have resulted in better revenues. Furthermore, Company has several exports destinations and enjoys stable customer base (local and exports).Kassim Textile continues to maintain a low leveraged capital structure and good coverages; which gives comfort to financial matrix. Going forward, the second wave of the pandemic has begun its course and lockdowns may be a cause of concern. However, the business community is expected to continue operations under strict SOPs, both; locally and in most of the export destinations of the Company.
The ratings are dependent on sustaining business profile of the Company by maintaining profitability and margins achieved from core textile operations.

About the Entity
Kassim Textiles (Private) Limited (Kassim) was incorporated on August 27, 1991 as a private limited company. It is a modern weaving unit that manufactures Denim fabric used for local and branded garment industry. The Company belongs to a a prominent business venture of Machiyara Group. Apart from Kassim Textiles, the Group has presence in the textile, construction and real estate development, mobile phones and trading etc.
Kassim Textile’s Board comprises four members, all are sponsors. The position of Chairman is held by Mr Muhammad Shabbir. He is also the CEO of the company. The CEO, Mr. Shabbir, belonging to the sponsoring family, possess expertise in textile and oversees the Company affairs. He is assisted by a professional and long associated management team.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.