June 17, 2019 (MLN): Pakistan Credit Rating Agency has maintained the entity ratings of Ghandhara Nissan Limited (GNL) at ‘A’ for long-term and ‘A1’ for short-term. The outlook on the assigned ratings is ‘stable’.
Company's performance was diluted owing to discontinuation of UD Trucks, which they managed to beef up with other alternative products. Ghandhara Nissan is solidifying its position in the market through the launch of JAC X-200 and Renault Trucks, recently. The company is also working to come into the passenger car segment. Keeping in view of the current market scenario, the turnout of these initiatives is pivotal.
The current economic slowdown and rupee devaluation though added pressure on the business profile of the company. The financial risk profile of GNL is strong. The company intends to raise long term debt borrowing for its expansion projects, which is expected to remain in comfortable range.
The ratings are dependent on upholding of the company’s business as well as financial risk profile. Two key elements are company’s stance on long term debt for potential projects and working capital management. Moreover, management’s ability to sustain its market share while benefiting from positive demand fundamentals is crucial.
