The Pakistan Credit Rating Agency Limited
22-Dec-23
Analyst
Faiqa Qamar
faiqa.qamar@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Corporate Rating | Jul-23
- Methodology | Correlation Between Long-term & Short-term Rating Scales | Jul-23
- Methodology | Rating Modifiers | Apr-23
Related Research
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PACRA Maintains Entity Ratings of Sayban International
| Rating Type | Entity | |
|
Current (22-Dec-23 ) |
Previous (31-Dec-22 ) |
|
| Action | Maintain | Upgrade |
| Long Term | BBB- | BBB- |
| Short Term | A2 | A2 |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The assigned ratings of Sayban International ("Sayban" or "the Business") take into account the extensive experience of the sponsors in the pesticide industry, strong brand, established industry presence and wide geographical reach in the domestic market. The sponsors have also set up Comega Life Sciences & Innova Agri Solutions to expand their agricultural presence. Sayban retains its market share despite fragmentation in the crop protection industry. The pesticide sector in Pakistan faced substantial challenges during CY23, marked by heavy rainfall and floods. Resultantly, the agri-chain incurred substantial losses, particularly affecting the major crops. However, the Business was able to manage the risk supported by an efficient procurement strategy and augmented business concentration in Punjab. Sayban holds diversified revenue streams from Pesticides, Plant Growth Regulators, Bio Fertilizers, Seeds, and Standard Fertilizers. The Business maintained a healthy topline backed by the introduction of new products in the market and a robust sales network across the country. Margins and in turn profits remain intact. The Business meets its working capital requirements through a mix of internal cash flows and short-term borrowings. The financial risk profile remains comfortable owing to adequate leveraged structure and strong coverages.
The ratings are dependent on the sustained business and financial risk profile of the Business. Meanwhile, improvement in governance practices would be beneficial for the ratings.
About
the Entity
Sayban International ("Sayban" or "the Business") was incorporated in 2005 as a partnership concern. The shareholding vests among three partners: Mr. Muhammad Azam Cheema and Mr. Shamsher Hussain holding ~44.2% each. While the remaining (~11.6%) shareholding vests with Mr. Muhammad Tariq. All three partners are actively involved in the management. Mr. Muhammad Azam Cheema heads the Business as the CEO and is supported by a team of experienced professionals.