Lahore, December 13, 2021 (PPI-OT): The ratings reflect Ismail Industries Limited’s (‘Ismail Industries’ or ‘the Company’) strong presence in confectionery, biscuits and plastic film manufacturing through established brands (Candyland, Bisconni, Snackcity and Astro Films). Growing middle class, coupled with timely capacity enhancements, have led to significant growth in revenues of the Company in the recent past. The ratings draw strength from the Company’s diversified revenue stream, supported by the plastic film manufacturing segment.
The Company has been able to sustain growth in revenues, owing to aggressive marketing campaigns and introduction of new food products despite challenges faced by the Company amidst the pandemic. The Company’s expansion projects were met by delays; However, sustained growth momentum and increase in export and local sales, highlights the Company’s strong business profile. The Company’s margins remained strong at the gross level, despite cost-push inflation and rupee depreciation.
However, higher share of profit was received from the associate company resulting in significant growth in the bottom-line. The Company having relatively high market share and brand recognition is anticipated to sustain the growth momentum. Furthermore, Ismail Industries’ strategic investments in its associated companies is expected to further provide additional cushion to the bottom-line, going forward. Meanwhile, despite a leveraged capital structure, the Company maintains a strong financial profile, through strong working capital management and adequate coverages.
The ratings are dependent on continued revenue growth and maintenance of margins. Prudent management of expansion and investment-related debt in order to meet financial obligations will be important. Decline in coverages and/or erosion of margins may adversely impact the ratings.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com