Press Release

JCR-VIS upgrades Entity Ratings of Ali Gohar & Company (Private) Limited

Karachi, March 07, 2016: JCR-VIS Credit Rating Company Ltd. has upgraded entity ratings of Ali Gohar & Company (Private) Limited (AG&C) from ‘A-/A-2’ (Single A Minus/A-Two) to ‘A/A-2’ (Single A/A-Two). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on 16th April, 2015.

The assigned ratings incorporate low business risk and sound financial risk profile of AG&C. Ratings also reflect company’s status as one of the leading national distributor in the country, improving cash flows & sizeable liquidity carried on balance sheet. Moreover, experienced & professional management team, sound IT infrastructure and favorable working capital cycle which results in limited external funding requirements provide support to the ratings.

Distribution industry in Pakistan is very fragmented and competitive in nature resulting in low margins for industry players. Introduction of stringent regulatory requirements in Punjab particularly for movement of temperature sensitive medicines and food items may pose challenges for smaller distributors and result in consolidation in the industry. This is expected to benefit distribution companies with strong infrastructure and focus on compliance and quality control. As per management, AG&C is well positioned to benefit from these regulations given that it already had the infrastructure in place prior to introduction of these regulations. Going forward, further strengthening the company’s infrastructure and compliance framework will be AG&C’s key focus.

Revenues of the company have depicted healthy growth during FY15 and 1HFY16. Along with organic growth from existing principals addition of new principals has also contributed to growth in turnover. With addition of new principals, growth in sales of high margin products and organic growth in sales from existing principals, profitability of the company is expected to grow, going forward. Capitalization levels of the company have strengthened over time on account of profit retention.

For further information on this rating announcement, please contact Mr. Jamal Abbas Zaidi (Ext: 516) or Mr. Javed Callea (Ext: 501) at 35311861-70 or fax to 35311872-3.

Mohammed Khalid Ali

Applicable Rating Criteria:
Industrial Corporates (October 2003)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2016 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited