PACRA Maintains Entity Ratings of E-Vision Manufacturing Limited

The ratings reflect the adequate business profile of E-Vision Manufacturing Limited (“the Company” or “E-Vision”) and its established position in the regenerated polyester staple fiber (r-PSF) industry. The Company has identified a niche in the textile industry by manufacturing fine white, black, and green regenerated polyester staple fiber and polyester chips using post-consumed polyethylene terephthalate (PET) bottles. Currently, this market is in a phase of rapid growth. According to the management’s representations various global environmental authorities are promoting to use of r-PSF as against virgin PSF because the manufacturing process of r-PSF consumes less energy and does not deplete natural energy resources and r-PSF is ~25% cheaper than virgin polyester fiber. Despite all macroeconomic turbulence and operational challenges such as high inflation, historic high policy rates coupled with massive rupee depreciation. During CY22, the company’s topline clocked in at ~PKR 2,086mln, reflecting a growth of ~37.7% on a YOY basis mainly due to the high prices of polyester. However, margins and profitability showed slight dilution due to the challenges mentioned. The Company’s financial risk profile is considered adequate with comfortable coverages, cashflows, and working capital cycle. Capital structure is leveraged where borrowings are comprised of short-term for working capital management. Going forward the sponsors of the Company have approved a capacity expansion plan from 60tpd (current) to 100tpd. This strategic expansion is expected to result in the refinement of the product quality and standard which will comprehend the export portfolio. The cost of expansion will be covered from internally generated cashflows and equity contributions from sponsors.
The ratings are dependent on upheld sustainable revenues and margins. Meanwhile, maintaining an adequate leveraged capital structure and strong coverages remain critical. Going forward, a better governance framework, improvement in the control environment, and strengthening the quality of external audit function by engaging auditors which are included in SBP’s panel of auditors.

About the Entity
E-Vision Manufacturing Limited is a public, unlisted entity incorporated in 2013. The Company is engaged in the manufacturing and regeneration of polyester staple fiber with a gross production capacity of 60 tons per day. The Company’s major shareholding (~60%) is held through an offshore investment Company, Marylebone Management Limited, incorporated in the British Virgin Islands and owned wholly by Mr. Salman Ganny. The remaining shareholding (~40%) rests with Mr. Abdul Ghaffar (CEO).