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Lahore, June 20, 2018 (PPI-OT): The ratings recognize the company’s significant position in the industrial and medical gases sector. The industry largely possesses oligopolistic structure: benefiting the players. With an expected growth in demand due to increase in industrialization and uptick in economic activity, GGL is pursuing an expansive strategy to become the market leader. The company’s revenue has improved on account of higher volumes as the company has successfully managed to add new customers in health sector, merchandise market and industrial undertakings.
Although the company’s financial structure is leveraged, incremental cash flows and, in turn, coverages are adequate and hence adequate financial profile. Given the group’s expansionary stance, sustained vigilance and support from sponsors is essential. Timely completion of GGL-III and subsequently smooth functioning is important. The sponsoring family has demonstrated support to the company in the past.
The ratings are dependent on the company’s ability to effectively utilize enhanced capacities. At the same time, management of financial risk particularly debt coverages, remain important, wherein any significant dilution would have negative implications for the ratings. Whereas, company’s market share and in turn sustained margins would support 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