PACRA Maintains Entity Ratings of Mobile Sales and Distribution (Private) Limited

Lahore, December 27, 2019 (PPI-OT): The ratings incorporate strong foothold of the company in the cellular distribution market. Optimizing on an extensive network of dealers, the company marks its presence as one of the four leading mobile distributors of Pakistan. The company functions exclusively with Samsung for distribution services across the country, enabling it to relish on exclusivity benefits, though this also poses a risk of dependence on the sole principal. Sponsors, being cognizant of the situation, are embarking on several initiatives to mitigate the risk, through diversification to other businesses.

Pakistan mobile import market witnessed a decline in FY19 owing to implementation of DIRBS and price hike factors. The same trend reflected in the topline of the company, which is expected to recover, going forward. The company’s governance framework has undergone several changes during the period under review, including induction of two independent directors on the Board. The understanding among the sponsors, although being tacit, is enriched by social bond.

Financial risk profile is reflected by adequate margins and healthy debt servicing capacity. With no long term debt and a sizable equity on books, capital structure reflects a comfortable outlook. Working capital strategies reflect dependence on short term borrowings, wherein the company is expecting efficiency. The ratings are dependent on the company’s ability to uphold its market position alongside improving performance indicators. Meanwhile, business diversification remains imperative.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com