March 4, 2019: Pakistan Credit Rating Agency has assigned initial ratings to Loads Limited at ‘A’ for long term and ‘A1’ for short term, with a stable outlook forecast.

The ratings reflect the strong industry positioning of Loads Limited in its respective niche. With a presence of up to four decades in the automotive industry, the company has established a formidable forte in the domestic market along with a committed client base.

The company employs its specific business model i.e. working through subsidiaries catering to the current product suite; Multiple Autoparts Industries (Private) Limited and Specialized Autoparts Industries (Private) Limited. Loads Limited has also nurtured its relationship in the years with the OEMs, providing comfort to the ratings.

The company has an admirable market share (~95%) in the sales of exhaust system. Strength in this segment emanates from exclusive agreements signed with the leading OEM’s (Suzuki, Toyota and Honda) in the country and technical collaborations with international players.

The company is gearing towards further diversification; expansion in the product suite and is venturing into manufacturing of Alloy Wheels. A new subsidiary Hi-tech Alloy Wheels Limited has been formed for the upcoming project. Commercial production is expected towards the end of the year. The company intends to go for an IPO to partially finance the new project.

Loads Limited has witnessed reduction in the margins and bottom-line as a result of heightened costs. Respite is on the horizon as evidenced by the latest reported numbers. Short term borrowings have inflated, an outcome of its need to fund its initiatives. The company intends to engage new automotive players emerging in the industry to increase its business volumes.

The ratings are dependent on the management's ability to sustain the financial risk profile while embarking into the new businesses venture.

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