Lahore, September 23, 2021 (PPI-OT):The ratings take comfort from Global Marketing Service (GMS) reputable business profile in the segment of clinical and medical lab equipment, which serve as a key ingredient in the health diagnostic field. GMS has two primary segments of operations: Clinical and Medical. Clinical division has significant revenue portion and deals with lab diagnostic and testing equipment kits including PCR Covid-19 kits. Due to on-going pandemic situation demand of PCR testing kits has significantly inclined which benefited the Company. The entity has experienced tremendous growth in revenues during FY21 and similar performance is expected to sustain in future which is positive sign for the ratings.

Performance of medical division also showed improvement and bodes well with diversification strategy of the entity. Key strategic pillars of GMS are responsibility and responsiveness towards customers need. Going forward the management has intended to merge clinical and medical division as a one unit and planned for corporatization of the entity. Management of GMS has also planned to develop internal audit department along with interim audit review function. The firm is led by Mr. Zafar, Owner, as assisted by other partners, some of whom are long standing with the firm.

The firm imports all of their inventory, hence exposed to currency fluctuation and associated pricing risks, Overall financial risk profile is characterized by upright working capital management, comfortable cashflows and coverages, adequate capital base and formal and non-formal leveraging. The growth took positive benefit from large demand related to COVID-19; apart from this, the size also grew independently as pandemic has shifted the focus towards the self well-being, healthcare and medical engineering segments. Reversal of key economy driven challenges; rupee depreciation, inflation will further strengthen the financial risk appetite of the Company.

The ratings are dependent on the firm’s ability to effectively utilize its existing capacity and management of financial risk particularly the debt coverages, wherein any significant dilution would be negative. Delivery on the envisaged business and corporate plan is crucial.

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