VIS Credit Ratings Affirms Stability in DWP Technologies’ Credit Outlook

Karachi, VIS Credit Ratings Company Ltd. (VIS) has reaffirmed the entity ratings of DWP Technologies (Pvt.) Limited (DWPTL) at A-/A-2, indicating a stable financial outlook with good credit quality and sound liquidity factors. The ratings reflect a consistent certainty in timely payment obligations and robust access to capital markets.

According to VIS Credit Rating Company Limited, the medium to long-term rating of ‘A-’ highlights DWPTL’s adequate protection factors, though subject to variations with potential economic shifts. The short-term rating of ‘A-2’ underscores a strong likelihood of timely financial obligations being met, supported by the company’s solid fundamentals and liquidity.

DWPTL, operational since its incorporation in February 2003, is engaged in manufacturing and selling industrial IT and related electronic products, with its headquarters and main operations based in Lahore. The business risk profile incorporated in the ratings considers the challenges from foreign exchange and currency transfer risks, exacerbated by the Pakistani Rupee’s consistent depreciation against the dollar. The industry is further strained by low foreign exchange reserves, exchange rate fluctuations, and import restrictions impacting production volumes.

Furthermore, the ratings take into account DWPTL’s profitability, which shows constrained revenue streams due to import limitations but improved gross margins from inventory gains in the fiscal year 2023. The company's capitalization remains adequate despite a slight increase in gearing and leverage in the first nine months of fiscal year 2024, while liquidity and coverage profiles are described as healthy, supporting ongoing operations and debt servicing capabilities.

The future outlook on these ratings remains contingent on the company’s ability to enhance its internal control systems and uphold its financial metrics in line with the assigned ratings.