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The Pakistan Credit Rating Agency Limited

Date
04-Dec-2017
Analysts
Jhangeer Hanif
jhangeer@pacra.com

Muneeb Rashid
muneeb.rashid@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • Debt Instruments Rating Methodology (Jun 17) [View]
  • Corporate Rating Methodology (Jul 17) [View]
  • Correlation between long-term and short-term rating scale (Jun 17) [View]

Related Research

  • Sector Study | Auto and Allied | Tyres (Nov 17) [View]
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PACRA Assigns Initial Entity Ratings to Panther Tyres Limited
 Rating Type Entity
Current
(04-Dec-2017-)
 Action Initial
 Long Term A-
 Short Term A2
 Outlook Stable
 Rating Watch -

Ratings take strength from strong industry positioning of Panther in its respective niches. The company has formidable market share in tyre and tube industry, especially in two wheel segment, whereas three wheel and four wheel segments are on the growth trajectory. The sponsors embarked upon a strategy to build a strong management team with a wholesome mandate: roles are clearly demarcated with high degree of delegation. The margins are sanguine though slightly constrained during FY17 due to build-up of significant inventory levels, however, the improving trend is visible in 1QFY18. Comfort is drawn from strong coverages coupled with adequate capital structure. Going forward, strong growth in auto sector amidst improving macro-economic conditions is expected to result in robust consumer demand. Panther is poised to take full advantage.

The ratings are dependent on the management's ability to sustain its business profile while benefiting from positive demand fundamentals; financial discipline is crucial. Moreover, strengthening of governance framework is pivotal for any growing business concern.
About the Entity
Panther Tyres Limited is an unquoted public limited company incorporated in 1983. The Company is primarily engaged in the production of tyres and tubes of vehicles. Panther is pioneer in the motorcycle tyre manufacturing industry of Pakistan. The company sells its product with the brand name “Panther” and it has since been renowned for quality products. These products are not only sold in the replacement market but also supplied to the auto industry of motorcycle, rickshaw and tractors. Mr. Mian Iftikhar Ahmed with his family own the entire shareholding of the Company. He is a renowned businessman and has previously been awarded with the “Best Businessman of the Year” title by Lahore Chamber of Commerce and Industry. He has also been the chairman of All Pakistan Tyres & Tubes Manufacturing Association.

The overall control of the Company vests in three members’ board of directors. Two are executive directors, including the chairman, while one is a non-executive member of the sponsoring family. Mr. Mian Iftikhar Ahmed is the thriving force behind the Company and is leading the business as a CEO/Chairman. He is supported by a team of qualified and experienced professionals.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.
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