PACRA Maintains Entity Ratings of ORIX Modaraba (28-08-2019)

Lahore, August 28, 2019 (PPI-OT): ORIX Modaraba (ORIXM) enjoys sound financial profile emanating from leveraging, managed liquidity, and sustained profitability. Moreover, good management quality, strong risk management systems and control environment provide strength to ORIXM’s profile. The management’s business strategy envisages volumetric growth in assets, albeit a bit slow due to the ongoing strained economic environment and rising interest rate scenario, to improve its performance trends. With this, the dip in profitability is planned to be recovered.

The expected growth would be funded through mix of internal sources and debt. However, the management expects to maintain the leveraging pattern at a comfortable level. The Modaraba’s affiliation with ORIX Leasing Pakistan Limited helps in further strengthening the risk management, providing established outreach and experience of parent, particularly in SME segment, which the management of Modaraba has identified as key growth driver.

The ratings are dependent on the management’s ability to sustain its strong financial profile while ensuring stable profitability. Deterioration in respective business size and consequent margins, leading to erosion of profitability, and/or coverages will have negative impact on the ratings.

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