Dynamic Packaging (Pvt.) Limited

RATING REPORT | Jan-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
16-Jan-26 BBB+ A2 Stable Upgrade -
17-Jan-25 BBB A2 Stable Maintain -
17-Jan-24 BBB A2 Stable Maintain -
17-Jan-23 BBB A2 Stable Initial -
About the Entity

Dynamic Packaging (Pvt.) Limited was founded as a private limited company on 23rd June 2004 and is currently engaged in the commercial production of Flexible and Pharmaceutical Packaging. The Company’s manufacturing plant is located in Raj Industrial Park Dullu Kalan. The Company is wholly owned by the sponsor family with major ownership of ~72% residing with Mr. Ashraf Ch, followed by Mr. Waqas Ashraf and Ms. Shazia Ashraf hold respectively ~20% and ~8% ownership of the Company.

Rating Rationale

The rating upgrade of Dynamic Packaging (Pvt.) Limited (“DP” or the “Company”) reflects sustained growth in its revenue base and the resulting improvement in profitability. The sponsor’s strong business acumen has been instrumental in driving the Company’s growth trajectory, supported by the sponsor family’s extensive experience in the packaging industry, where they have been actively engaged since 2004. The Company is predominantly manufacturing different types of Flexible Packaging, Pharmaceutical sachets, Tropical Blister Foil, Aluminum Blister Foil, and Cold cold-forming aluminum Foil packaging. The Family's businesses include i) Dynamic Packaging (Pvt.) Limited ii) Global Inks & Chemicals (Pvt.) Ltd iii) Royal Traders. The Company is backward integrated, wherein Global Inks & Chemicals (Pvt.) Ltd provides a complete range of solvent-based ink systems for the Rotogravure and flexographic printing industries across Pakistan. The demand for packaging products is mainly derived from the food and pharmaceutical industries. The strong and stable customer base of the Company bodes well for the assigned rating. The raw material of the finished product is partially imported, hence, exposed to exchange rate risk. As per management representation, the Company has captured a good share of the flexible packaging market. While being the sole manufacturer of pharmaceutical packaging in Pakistan, the Company holds ~ 5% market share; the rest of the market of ~95% is captured by importers. In FY25, the capacity utilization of the Company remained adequate. While the pharmaceutical sector is expected to support improved capacity utilization, it remains on the lower side due to logistical disruptions, primarily stemming from heightened regional tensions, which led to shipping delays and vessels being held offshore.
In FY25, Dynamic Packaging recorded healthy performance, reflected by a Gross Profit Margin of 9.5% (FY24: 9.1%) and a Net Profit Margin of 3.5% (FY24: 3.4%). Equity stood at ~PKR 2,584mln at the end of FY25 (FY24: ~PKR 2,315mln). The Company is low leveraged with strong financial indicators as of the end of Jun’25. Additionally, the Company has planned to install a solar energy system with a total capacity of approximately 1.3 MW in two phases. Under Phase I, the Company has already installed 617 kV of solar capacity at the factory. The remaining capacity, bringing the total to approximately 1.3 MW, will be installed under Phase II, which is expected to be completed by the end of FY26. Once fully operational, this initiative is expected to materially reduce reliance on WAPDA electricity and support a meaningful share of the factory’s energy requirements, and give the Company an estimated PKR 25mln per annum cost cutting on utility.

Key Rating Drivers

The ratings are dependent upon the management’s ability to improve margins while sustaining its market share. Prudent management of the working capital and sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will impact the ratings.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Dynamic Packaging (Pvt.) Limited


Rating Analysis

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Profile
Legal Structure

Dynamic Packaging (Pvt.) Limited (‘DP’ or the 'Company’) was incorporated as a private limited company on 23rd June 2004.


Background

The Company provides flexible packaging products to customers of various industries including snacks, beverages, confectionery, pharma, etc. The main sponsor family has utilized his skills and experience to turn Dynamic Packaging (Pvt.) Limited into a competent contender in the flexible packaging industry.


Operations

Dynamic Packaging (Pvt.) Limited provides different types of Flexible Packaging, Pharmaceutical Sachet, Tropical Blister Foil, Aluminum Blister Foil, and Cold Forming Aluminum Foil packaging to customers of various industries.


Ownership
Ownership Structure

Majority stake of Dynamic Packaging (Pvt.) Limited lies with Mr. Ashraf Ch who owns ~72% of the total shares. Mr. Waqas Ashraf and Ms. Shazia Ashraf hold respectively ~20% and ~8% ownership of the Company.


Stability

The ownership structure is stable as owners have vast experience in the packaging industry while having a personal stake in the business. Mr. Ashraf Ch also owns Global Inks & Chemicals (Pvt.) Ltd, established in 2008, the Company is providing a complete range of solvent-based ink systems for the Rotogravure & Flexographic printing industries across Pakistan.


Business Acumen

The owners and directors of Dynamic Packaging (Pvt.) Limited have extensive relevant experience and insights about the packaging industry owing to their family background. Mr. Ashraf Ch and Mr. Waqas Ashraf are involved in managing the affairs of the Company. Mr. Waqas Ashraf oversees all the Company's financial and tax-related affairs. While Mr. Ashraf Ch is involved in managing the operational activities of the Company.


Financial Strength

Dynamic Packaging (Pvt.) Limited is a stable business entity. The Company’s sister concern Global Inks & Chemicals (Pvt.) Ltd also has a broad portfolio of customers. This strong forward integration strengthens the customer's bond and gives a competitive edge through strong supply chain support. Mr. Ashraf Ch has significant resources to finance the Company if the need arises. The land on which the Company’s production facilities are located is owned by the entity.


Governance
Board Structure

The Company’s Board structure primarily revolves around its sponsor family. It consists of three directors: Mr. Ashraf Ch, the Chairperson, who also serves as the executive director, Mr. Waqas Ashraf Ch, another executive director; and Ms. Shazia Ashraf, a non-executive director. The absence of independent directors and board committees decreases governance oversight.


Members’ Profile

Mr. Muhammad Ashraf Chaudhry founded the Dynamic Group in 2004 and is currently the Chairperson of Dynamic Packaging (Pvt) Ltd. He is also serving as the CEO of Global Inks & Chemicals (Pvt) Ltd. He is L.L.B by qualification and holds various certifications in the Packaging, printing & Ink industries coupled with vast experience of around 37 years in leadership positions of different business ventures of his family. Mr. Waqas Ashraf joined Dynamic Packaging (Pvt.) Limited as an executive director in September 2017. He also serves as a director at Global Inks & Chemicals (Pvt.) Ltd and as the CEO at Royal Traders Pvt Ltd. Mr. Waqas holds a business degree from Queen Mary University (UK) and has completed training periods at HBL and Deutsche Bank’s foreign branches during his studies. Since joining the Dynamic Group, he has been responsible for overseeing the finance and marketing functions of the Group Companies. Ms. Shazia Ashraf, the wife of Mr. Ashraf Chaudhry, serves as a non-executive director of the Company. She holds a Master's degree and is also a director at Global Inks & Chemicals (Pvt) Ltd.


Board Effectiveness

As a family-driven Board, there is a strong sense of cohesiveness. The Board has strong industry and operational leadership, with active oversight of key functions. Adding independent directors would further strengthen governance and objectivity.


Financial Transparency

The Company’s external auditors, Qadeer and Company, Chartered Accountants have expressed an unqualified opinion on the financial statements for FY25. The auditors have a satisfactory QCR rating from ICAP.


Management
Organizational Structure

Dynamic Packaging (Pvt.) Limited has developed a defined organizational structure keeping in mind the Company’s operational needs. The Company has a lean organizational structure to control personnel costs while efficiently managing its operations.


Management Team

The management team comprises experienced professionals. Mr. Muhammad Ashraf Chaudhry is the Chief Executive Officer of the Company. Mr. Ahmad Yasir Ch the Chief Operating Officer has been associated with the Company since 2012. Mr. Ahmad has over 27 years of relevant experience and also has special expertise in the packaging industry. He has been working with the Company for over 13 years. The Company’s Chief Financial Officer, Mr. Qulb-E-Abbas, had an MBA in Finance and, an LLB and has over 15 years of relevant experience. He has been working with the Company for over 13 years.


Effectiveness

The experience of the sponsors along with a professional management team has helped the Company to streamline its operations and cut down on its costs. The production facilities have minimal wastage which is effectively managed through re-cycling and re-using in the process.


MIS

To generate MIS and operational reports, the ERP software, Tally 9 is being used. The Company is currently in the process to the implementation of SAP by outsourcing the software development function from Hussain and Choudhry Consulting.


Control Environment

The Company has developed an effective mechanism for the identification, assessment, and reporting of all types of risk arising out of the business operations because there is an internal audit department in place to ensure operational efficiency which operates under the direct supervision of directors.


Business Risk
Industry Dynamics

The packaging industry remains semi-seasonal, with peak demand during the summer months driven by beverage consumption. While raw material costs are partially linked to crude oil prices, recent stability in the PKR/USD exchange rate has provided some relief to input cost pressures. The sector continues to benefit from steady demand for packaged goods, particularly in the food and beverage segment. Companies with efficient operations and strong customer relationships are well-positioned to capitalize on these stable market conditions while managing material cost volatility.


Relative Position

Dynamic Packaging (Pvt.) Limited has captured a good share of the flexible packaging and pharmaceutical packaging market. Major local players in the flexible packaging industry include Packages Convertors, Cherat Packaging, Century Paper and Dynamic Packaging (Pvt.) Limited. The Company is also the sole manufacturer of pharmaceutical packaging. As per management representation, the Company currently holds ~5% market share of pharmaceutical packaging, and the remaining ~95% market is held by local importers. While in flexible packaging, the competition is tough, however, the Company retained an adequate presence and strong customer base with long association.


Revenues

The Company generates revenue from the sale of flexible packaging and pharmaceutical packaging materials in the local market.


Margins

In FY25, the gross profit margin and operating profit margin largely remained the same and reported at ~ 9.5% and ~ 6.7% respectively (FY24: ~ 9.1% and ~ 6.7%). Consequently, in FY25, the Company had a net profit margin of ~ 3.5% (FY24: ~ 3.3%).


Sustainability

Dynamic Packaging (Pvt.) Limited is a stable business entity supported by a diversified client base, comprising pharmaceutical clients (Ferozsons Laboratories, Searl Pakistan, and LCI Pakistan) and FMCG/flexible packaging clients (Pepsi Cola Intl (Pvt) Ltd, Nestle Pakistan Ltd, and National Foods Limited). The Company also has meaningful growth potential in the pharmaceutical segment, while its sister concern, Global Inks & Chemicals (Pvt.) Ltd, further strengthens business continuity through a broad customer portfolio.


Financial Risk
Working capital

In FY25, the Company’s inventory days stood at ~52 days (FY24: ~54 days). Meanwhile, trade receivable days remained the same as last year at ~45 days, and trade payable days decreased to ~7 days (FY24: ~9 days). Consequently, the Company’s net working capital days also largely remained the same during FY25 and stood at ~90 days (FY24: ~91 days). 


Coverages

In FY25, the Company’s Free Cash Flows from Operations (FCFO) stood at ~PKR 489mln, increasing from ~PKR 407mln in FY24. The FCFO/Finance cost stood at ~ 3.1x (FY24: 3.1x), which is a good coverage level for the Company. While the Company does take only short-term financing from financial institutions, the strategy is to keep the Company mainly equity-focused; thus, the finance cost is planned to be on a manageable scale moving forward.


Capitalization

The Company has a low-leveraged structure, with only PKR 40mln as long term loan as of FY25. Its gearing ratio has decreased from ~ 29.9% at the end of FY24 to ~ 32.8% at the end of FY25, indicating that the Company does have debt, but it is not increasing its debt ratio currently and is instead relying more on organic growth. The Company obtains short-term debt to meet the working capital requirements.


 
 

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Dynamic Packaging (Pvt.) Limited


Financial Summary

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(PKR mln)


 Jun-25
12M		 Jun-24
12M		 Jun-23
12M
A. BALANCE SHEET
11. Shareholders' Equity 2,584 2,315 2,074
B. INCOME STATEMENT
C. CASH FLOW STATEMENT
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 11.2% 11.1% 17.6%
b. Gross Profit Margin 9.5% 9.1% 9.0%
c. Net Profit Margin 3.5% 3.4% 3.3%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 1.6% 4.1% 0.6%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 11.0% 11.0% 10.4%
2. Working Capital Management
c. Current Ratio (Current Assets / Current Liabilities) 19.0 15.6 11.9
3. Coverages
a. EBITDA / Finance Cost 3.7 3.7 3.7
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 32.8% 29.9% 31.4%

Jan-26

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Dynamic Packaging (Pvt.) Limited


Rating Scale

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Jan-26

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Dynamic Packaging (Pvt.) Limited


regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
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    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
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  5. Monitoring and Review
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    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
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