December 28, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained entity ratings of Panther Tyres Limited at ‘A-‘ for long-term and ‘A2’ for short-term, with a ‘stable’ outlook forecast.
According to the rating agency, the ratings take strength from strong industry positioning of Panther Tyres in its respective niches.
The company has a formidable market share in 2& 3 wheeler tyre and tractor tyre segment of tyre & tube industry.
The sponsors have built a strong management team with a wholesome mandate: roles are clearly demarcated with high degree of delegation.
The company intends to improve its overall organisation structure and inculcate financial transparency as per Code of Corporate Governance.
Latest evidence is the appointment of a professional in the position of the CEO. Margins are sanguine though slightly constrained during FY18 due to increase in prices of raw material. The company is strengthening its international presence.
The ratings draw comfort from strong coverages coupled with adequate capital structure.
Going forward, the demand from replacement market is expected to remain strong whereas the OEMs' demand is expected to contract due to increased prices.
Moreover, the ratings are dependent on the management's ability to sustain its business profile with careful management of market risks, increase in international outreach and improvement in governance structure.
