Credit rating agency, CARE has assigned ‘BB+’ rating to Samtex Fashions’ Long-term bank facilities worth Rs 5.57 crore. The rating agency has also assigned ‘A4+’ rating to the company’s Short-term bank facilities worth Rs 29.50 crore.
The company has received the said ratings on the back of its low profitability margins, leveraged capital structure, low coverage indicators and working capital intensive nature of operations. Furthermore, the ratings also take into account its high exposure to group entities, geographical concentration and its susceptibility to foreign exchange fluctuation risk.
Samtex Fashions, a 100% export-oriented unit was incorporated in April 1993. The company is engaged in manufacturing of readymade garments, mainly trousers, shirts, jackets, shorts and skirts.