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KARACHI: In a recent development, The Pakistan Credit Rating Agency Limited (PACRA) has maintained the entity ratings of Advance Telecom (Pvt.) Limited (ATPL), recognizing its resilient market presence amid challenging industry dynamics. As a key distributor of mobile handsets and accessories in Pakistan, ATPL continues to leverage its established partnerships with global brands such as Tecno, Itel, and Nokia.
ATPL’s extensive distribution network spans both urban and semi-urban areas, serving a diverse clientele that includes retail and institutional customers. The company’s operational synergy with local assembler Enercom Technologies (Pvt.) Ltd. is noted for enhancing product availability and diversification.
The mobile handset sector saw a return to normalized activity in FY25, following an atypical FY24 where industry volumes surged due to pre-emptive stocking ahead of new sales tax regulations. This shift resulted in a 27 percent decline in ATPL’s revenues, which fell to PKR 37 billion from PKR 51 billion the previous year.
The company’s profitability metrics reflected this downturn, with slight reductions in gross, operating, and PBIT margins. However, ATPL managed to maintain a steady net margin of 0.7 percent through careful cost management.
Faced with low spreads and tight operating margins, ATPL has strategically diversified into the energy sector, venturing into solar panels, inverters, and batteries—areas offering better pricing flexibility and margins.
ATPL’s financial health is marked by increased working capital pressures and an extended cash conversion cycle. Short-term borrowings decreased slightly, while equity saw a minor improvement.
Governance remains a focal point, with a family-led structure and centralized decision-making. However, the lack of independent oversight and an internal audit function presents challenges.
The ratings hinge on ATPL’s ability to sustain its market position, improve margin resilience, enhance governance, and support its balance sheet amid diversification efforts. Sponsor support continues to be a crucial factor during operational challenges.