Karachi, November 03, 2022 (PPI-OT): VIS Credit Rating Company Ltd. has assigned initial entity ratings of ‘A/A-1’ (Single A/A-One) to Popular International (Private) Limited (PIPL). Medium to long term rating of ‘A’ signifies good credit quality. Protection factors are adequate. Risk factors are considered variable if changes occur in the economy. Short term rating of ‘A-1’ denotes high certainty of timely payment, excellent liquidity factors supported by good fundamental protection factors; risk factors are minor. Outlook on the assigned ratings is ‘Stable’.
PIPL is principally engaged in import, warehousing, marketing and distribution of surgical equipment and supplies, pharmaceuticals, diagnostic and healthcare products. The Company is organized into four main segments namely Surgical, Human, Biological and ACON with surgical segment being the flagship business.
Assigned ratings take into account PIPL’s dominant position in the life saving equipment and disposables market with strong and long-standing relationships with key international principals. Exclusive partnerships with the same allow PIPL to position themselves as a key market player. Ratings also take into account the diversified revenue stream from several segments of the industry, which together with steady demand supports the business risk profile. Ratings further factor in adequate distribution infrastructure and controls as well as sound financial profile as reflected by low leveraged capital structure, conservative financial policy and strong liquidity profile. Overall, corporate governance framework remains adequate with room for improvement in external control framework.
Assessment of financial profile reflects steady topline growth over the years supported by strong gross margins relative to peers. Rising freight costs, currency devaluation and enhanced focus on new product additions has affected gross margins on a timeline basis; however, improved operational efficiencies resulted in higher net margins. Going forward, management envisages profitability levels to depict improvement given planned organic growth.
Liquidity profile is considered sound with strong cash flow coverages. Capitalization indicators are reflective of conservative financial policy with low leverage, relative to industry. Ratings remain dependent upon maintenance of profitability profile with low gearing and leverage metrics, growth in equity base, underpinned by profit retention and dominant position of the company in its market segment.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/