October 30, 2018 (MLN): JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A-Minus/A-Two) to The Thal Industries Corporation Limited (TICL). Outlook on the assigned ratings is ‘Stable’.
According to a press release by the agency, the medium to long-term rating of ‘A-’ denotes good credit quality with adequate protection factors while the short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamental and liquidity factors.
According to JCV-RIS, the ratings assigned to TICL incorporate its cornerstone position in a diversified industrial conglomerate, “Almoiz Group of Companies” having business interests in beverage, sugar, steel, power generation and textile.
“The ratings incorporate integration with group owned Beverage Company which caters to the production and regional distribution of one of the leading international soft drink brands,” divulged JCR VIS.
In addition, the company’s recent efforts towards revenue diversification through forward integration into co-generation provides support to profitability and partially assists in withstanding the impact of prevailing downturn in sugar prices.
However, heightened business risk owing to overall dismal performance of sugar sector translated into weakening of financial risk profile the company.
Nevertheless, the government’s recent initiative of allowing export of 1.0m tons of sugar is expected to help in reducing surplus stock and to have positive connotation for the overall industry.
Going forward, the company expects a positive full year impact of electricity sale, however, the performance of the company will be primarily dependent on the trend in sugar prices.
