Fitch affirms DSI Holdings at 'BBB+(lka)'

Fitch Ratings Lanka has affirmed the National Long-term rating of DSI Holdings Limited (DSIHL), as well as its senior unsecured debentures at 'BBB+(lka)'. The Outlook on the ratings remains Stable.

The rating affirmation reflects DSIHL's position as Sri Lanka's largest manufacturer and retailer of footwear and the franchise of its three main brands. The agency believes DSIHL's product range, distribution network, brand franchise and operational model provides some protection against increasing competition from relatively lower cost, small scale domestic manufacturers.

Fitch also takes comfort from high import duties that have been in place since late 2006, which have resulted in significantly lower competition from imports.

DSIHL's strong market position, coupled with low competition from imports, has allowed the company to increase its footwear retail prices with relative ease.