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Karachi, July 13, 2020 (PPI-OT): VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of DWP Technologies (Pvt.) Limited (DWPTL) at ‘A-/A-2’ (Single A Minus /A- Two). The assigned ratings have been placed on ‘Rating Watch-Negative’ status. The long-term rating of ‘A-’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and fundamental protection factors. The previous rating action was announced on February 28, 2019.
The ratings assigned to DWPTL take into account the company operating under the umbrella of DWP Group; its presence in the ever-evolving highly skilled IT solutions and services sector coupled with extensive knowledge and expertise of the management team in the relevant industry. The ratings draw comfort from the company’s long-term business relations with the vendors comprising top-tier multination information technology companies and customers including largest telecom companies and banking institutions of Pakistan.
Barriers to entry are considered moderate due to demanding technical, financial and operational expertise for pre-qualification bidding. The ratings reflect minimal reliance of the company on long-term borrowings and manageable leverage indicators. However, the ratings factor in timeline decline in revenues resulting in heightened financial risk for the company; volatility in liquidity profile remains a key rating concern. Further, ratings remain sensitive to business risk inherent to technology companies.
The ongoing geopolitical scenario, global economic landscape and slowdown in domestic economic activity amidst the COVID-19 pandemic is likely to pose financial and operational risk to the company impacting revenues, profitability, liquidity and debt repayment capacity going forward. Company’s ability to maintain scale of operations, sustain profit margins and contain leverage indicators around current levels would be the key ratings sensitivities.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/