Panther Tyres likely to observe limited demand for OEMs: PACRA

April 15, 2019 (MLN): Pakistan Credit Rating Agency has maintained entity ratings of Panther Tyres Limited at ‘A-’ for long-term and ‘A2’ for short-term, with a stable outlook forecast assigned to the company.

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.

Revenue stream is segmented into Original Equipment Manufacturers (OEMs) and Replacement Market, wherein replacement market has a higher inclination. The company's financial risk profile is demonstrated by stable margins, healthy coverages and adequate capital structure.

Additionally, the company is strengthening its international presence. Going forward, demand from replacement market is expected to remain strong whereas the OEMs' demand is expected to remain range bound due to pass-on effect of increased costs.

The ratings are dependent on the management's ability to sustain its business profile with cautious management of market risks, increase in international outreach and improvement in governance structure.

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