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Karachi: VIS Credit Rating Company Ltd. has reaffirmed the Broker Fiduciary Rating of Darson Securities (Private) Limited at BFR3+, signifying the company’s good fiduciary standards. The outlook remains stable, as announced in the previous rating action in December 2023.
The rating reflects Darson Securities’ adequate business and financial sustainability, alongside a satisfactory ownership and governance framework. The company’s internal controls and regulatory compliance are deemed sound, with strong management and client services.
Operating for over two decades, Darson Securities provides brokerage services to both retail and foreign institutional clients. The company’s operations are centered in Karachi, with its registered office in Lahore and a network of 10 branches across the nation. Darson Securities holds a Trading Right Entitlement Certificate from the Pakistan Stock Exchange Limited since 2000, allowing it to offer trading and self-clearing services. Its external auditors are recognized in the ‘A’ category on the State Bank of Pakistan’s approved list.
The rating considers the company’s ownership and governance framework, featuring a three-member board lacking independent representation. Expanding the board to include independent directors could enhance governance and diversify board committees. While management and client services are strong, improvements in investor grievance procedures could further enhance client services. Strengthening disaster recovery measures by outsourcing offsite backups is recommended to bolster the company’s resilience.
Financially, Darson Securities demonstrated a strong rebound in profitability in FY24, driven by higher brokerage revenues and increased industry volumes. This momentum continued into the first half of FY25, improving operational efficiency. The company’s liquidity profile remains adequate, with low market risk and nominal debt supporting its capitalization profile. Future focus on revenue diversification, operational efficiency, and maintaining key financial ratios will be crucial for sustaining its rating.