JCR-VIS assigns Initial Ratings of Rajby Textiles (Private) Limited

Karachi, October 27, 2016 (PPI-OT):JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial ratings of Rajby Textiles (Private) Limited (RTPL) at ‘A-/A-1’ (Single A Minus/A-One). Outlook on the assigned ratings is ‘Stable’.

RTPL is part of Rajby Group (RG) operating in textile field for about forty years. RG’s operations over the last two decades have been concentrated in export oriented garment stitching under the umbrella of Rajby Industries and denim manufacturing performed at Rajby Textiles (RT) since Feb’2005. RT upgraded to a state of the art denim manufacturing facility in 2011. RTPL took over operations of RT from July’2015 onwards. An expansion plan doubling the capacity of RTPL is underway, expected to be complete by 4Q-FY17.

The rating takes into account the sound sponsor profile and their successful growth in the garment and denim manufacturing and in its export marketing. The rating also relies upon the current and projected strong liquidity and capitalization of RTPL along with the ability to efficiently manage production capacity utilization to enhance revenue generation.

Over the last few years, with the increase in production capacity, RTPL has been able to diversify revenue streams through increased sales in the international market, while supplying majority proportion to a group company. This is achieved through the use of state-of-the-art production machinery (sourced from Germany and Belgium) and a motivated work-force.

Y-o-Y growth in fund generation provides RTPL with a strong debt servicing ability. The company utilizes debt for the acquisition of imported machinery and for working capital requirements. However, despite growth in additional debt for expansionary purposes, leverage indicators and servicing ability are projected to remain healthy. In line with current production trends, RTPL envisages that FY20 onwards, all working capital requirements will be met through internal cash generation. Rating would be dependent upon maintaining of projected risk profile, going forward.

For more information, contact:
Ms. Sobia Maqbool
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk