Declining topline and margins to negatively impact Berger Paints' ratings

MG News | March 22, 2019 at 09:59 AM GMT+05:00

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March 22, 2019 (MLN): Pakistan Credit Rating Agency (PACRA) has assigned initial entity ratings to Berger Paints Pakistan Limited, at ‘BBB+’ for long term and ‘A2’ for short term, while the outlook forecast on the rating action is ‘stable’.

According to PACRA’s press announcement on this occasion, the ratings reflect Berger’s established position and brand recognition in the premium domestic paint market of the country.

They further incorporate strong governance framework and experienced management team along with effective control framework.

“The ratings are dependent upon the management’s ability to improve margins and profitability, meanwhile prudent management of the working capital, maintaining good coverages and strong capital structure is also important,” says the agency.

Decline in topline and deterioration in margins leading to erosion of profitability will have negative impact on the ratings.

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