'A'-(lka) rating for DSIHL

Fitch Ratings Lanka affirmed DSI Holdings Limited's National Long-Term rating at 'A'-(lka) with stable outlook. Its senior unsecured notes have also been affirmed at 'A' - (lka).

The rating reflects DSIHL's leading market position in SLs footwear industry and the resilience of its businesses to economic cycles, which has largely allowed the company to sustain its sales and profit margins.

DSIHL also benefits from a lack of strong competition in the footwear market, helped by high import duties since 2005.

The rating is constrained by a lack of clarity on the credit profile of its 100 percent parent D. Samson Group (DSG) of which DSIHL accounted for 66 percent of revenue and 50 percent of profits at end March 2010, due to delays in producing consolidated financial statements of the group.

DSIHL's revenue and EBITDAR grew 23 percent and 28 percent, in the financial year ended March 2011, largely on account of a sharp increase in average prices across its footwear business.