PACRA Assigns Initial Entity Ratings to Nagina Cotton Mills Ltd

November 26, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has assigned initial entity ratings to Nagina Cotton Mills Limited at ‘A-’ for long term and at ‘A2’ for short term, with a ‘stable’ outlook forecast.

According to the rating agency, the ratings reflects Nagina Cotton Mills Limited's improving business profile in harmonization with textile industry dynamics.

The assigned ratings derive comfort from Nagina Cotton’s association with Nagina Group, and are dependent on the company’s ability to sustain its business profile. The sufficient cash generation to fulfill the increasing financial obligations remain critical for the ratings.

The company’s revenues are on growing trajectory over the years, a factor of continuous BMR translating into operational efficiencies, eventually higher production volumes, the report added.

Moreover, the rupee devaluation has provided a requisite breather to the company to sustain its business margins, despite declining exports share. Leveraging of the company has increased owing to debt-driven BMR; though remains modest.

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