Madiha International (Pvt.) Limited

RATING REPORT | Apr-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
03-Apr-26 BB+ A3 Stable Maintain -
03-Apr-25 BB+ A3 Stable Upgrade -
03-Apr-24 BB A3 Stable Maintain -
03-Apr-23 BB A3 Stable Maintain -
14-Sep-22 BB A3 Stable Initial -
About the Entity

Madiha International (Pvt.) Limited was established in 2016 as a private limited Company, registered with the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act, 2017. Headquartered in Karachi, the Company operates as part of a family-owned business group. Ownership is divided among four shareholders, each holding a 25% stake: i) Mr. Usman Saleem Bikiya, ii) Mr. Muhammad Bilal, iii) The remaining 50% is held by other family members.
The Board of Directors (BoD) consists of three members. Mr. Muhammad Bilal, serving as the CEO, oversees the Company’s financial matters and provides external advisory support. Mr. Usman Bikiya is one of the Company's directors.

Rating Rationale

The assigned rating of Madiha International (Pvt.) Limited (“Madiha International” or the “Company”) reflects its established position in the import and trading of printer papers in Pakistan, supported by a stable customer base, efficient supply chain management, and a relatively low-leveraged capital structure. The Company benefits from the sponsors’ extensive experience in the paper trading business and their continued financial support when required, which provides additional comfort to the assigned rating. The Company markets its products under recognized brand names, including “BLC, PPC, and IK Copy logo”, which have gained acceptance in the local market over time. The overall paper industry in Pakistan comprises manufacturers, converters, and commercial importers, within which Madiha International has positioned itself as a notable importer. The Company’s supply chain is supported through its dedicated intender, International Business Management, which facilitates sourcing and procurement of paper products from international markets and ensures the timely availability of inventory. The Company serves a stable and diversified clientele, primarily consisting of corporate customers, including reputable financial institutions and other established organizations. Demand for printer paper remains largely linked to commercial and institutional consumption, which provides relative stability to the Company’s sales volumes. During FY25, the Company maintained a stable operational profile. The financial risk profile remains manageable, as the Company largely relies on internally generated funds and sponsor support rather than excessive reliance on external borrowings.

Key Rating Drivers

The rating is dependent on sustaining its market share and prudent management of the working capital. While maintaining sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will impact the ratings. Moving forward, improvement in the governance and management framework remains of vital importance.

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

Madiha International (Pvt.) Limited


Rating Analysis

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Profile
Legal Structure

Madiha International (Pvt) Limited (“MIPL” or “the Company”) was established in 2016 as a private limited Company registered with SECP under the Companies Act, 2017


Background

The Company is primarily engaged in the import of paper; sizing and trading of printer paper in the local market. The Company has its head office situated in 2nd Floor, Dar-ul-Hanna Bldg. paper market, near New Burhani Hospital, Karachi, Sindh, Pakistan.


Operations

Since its inception, the Company is engaged in the trading of printer papers and providing them to the local industry in Pakistan. The Company is enjoying good market reputation, situated in Sindh, Pakistan mainly in Karachi. All sales of the Company are direct sales and no dealers are involved in the chain.


Ownership
Ownership Structure

MIPL, a family owned business, is owned by four shareholders, each holding a stake of 25%.


Stability

Affiliation with a group characterized by implicit collaboration among its entities positively supports the Company’s rating.


Business Acumen

The Company’s owners and directors bring substantial industry-relevant experience and insights, rooted in their family’s long-standing involvement in the packaging sector. Mr. Muhammad Bilal and Mr. Usman Saleem Bikiya provide dynamic leadership, leveraging their extensive business expertise.


Financial Strength

The Company’s asset-light, high-turnover business model has enabled it to build a strong brand presence among the leading importers of paper and related products in the southern market.


Governance
Board Structure

The Company’s Board of Directors (BoD) consists of four members, all of whom are also owners. The Board is chaired by Mr. Muhammad Bilal, who provides leadership and strategic guidance to drive the Company’s ongoing growth and success.


Members’ Profile

Mr. Usman Saleem Bikiya is a seasoned professional in the business sector, having been associated with the Company since its inception and contributing significantly to its success. Mr. Muhammad Bilal, a graduate from the USA, brings extensive business experience to the leadership team.


Board Effectiveness

The Board meetings are held on a quarterly basis.


Financial Transparency

The lack of an internal audit function indicates scope for further strengthening the corporate governance framework. M/s Mushtaq & Co., Chartered Accountants, serves as the Company’s external auditor. The firm holds a QCR rating from ICAP and has issued an unmodified audit report for the financial year ended 30 June 2025.


Management
Organizational Structure

The Company operates with a lean organizational structure, organized into three functional departments: 1) Sales & Marketing, 2) Human Resources, and 3) Accounts & Finance.


Management Team

Mr. Muhammad Bilal serves as the CEO of the Company. Each department comprises 4–5 hierarchical levels, reflecting a well-defined and adequate management structure.


Effectiveness

The streamlined management structure enables efficient and timely operations, with senior management maintaining primary oversight and control over the Company’s activities.


MIS

The Company’s Management Information System (MIS) produces comprehensive financial reports on a monthly basis for Board review. In addition, the MIS generates various management reports that offer detailed insights for senior management’s evaluation, supporting informed decision-making by focusing on key performance indicators, financial trends, and operational metrics.


Control Environment

The Company has not appointed any in-house audit team.


Business Risk
Industry Dynamics

Pakistan’s packaging industry consists of four major segments, paper, plastic, tinplate and glass. Paper and plastic segments occupy the major share in total market. Over FY21–FY25, the Paper Packaging segment has remained largely stable in terms of production levels. Growth is supported by rising demand for sustainable packaging and tighter environmental regulations, including EPR, which favor recyclable fiber-based materials. Advances in barrier coatings (e.g., bio-based and nano-cellulose) are improving paper’s functional performance, while digital printing and small-batch production are enhancing supply-chain flexibility and boosting the appeal of customized paper packaging solutions. The production level of Paper over the last five years has a CAGR of ~3.5%. This reflects the stable demand of the segment as it makes up a significant portion of overall Paper and board production. The production of Paper decreased marginally by ~2.9% YoY in FY25 to ~355,513MT from ~366,267MT in FY24. Production declined to ~54,435MT as of 2MFY26 (2MFY25: ~61,464MT). (Source: PACRA Sector Study)


Relative Position

According to management representation, the Company maintained an average market share of approximately 30% in printing paper imports during FY25.


Revenues

In FY25, the Company’s revenue declined compared to FY24. This reduction was primarily driven by subdued demand for paper, which led to lower sales volumes and adversely affected the overall financial performance.


Margins

During FY25, the Company’s gross margin improved compared to the previous year. The operating margin also strengthened, supported by an increase in gross profit. The finance cost remained broadly stable on a year-on-year basis. Consequently, the Company’s net income recorded a notable increase, leading to an improvement in the overall net profit margin.


Sustainability

As per the management, the demand for printer paper in the Banks and other organizations will remain on an increasing trend. Going forward, MIL will generate a healthy net income.


Financial Risk
Working capital

At the end of June 25, the net working capital cycle days increased to 131 days. Furthermore, the Company’s trade assets declined compared to the previous year, primarily due to a reduction in trade receivables. The Company continues to meet its working capital requirements through short-term borrowings, which also decreased on a year-on-year basis.


Coverages

In FY25, the Company’s free cash flow improved compared to the previous year. However, EBITDA declined on a year-on-year basis. Despite this, the Company’s debt servicing capacity strengthened, as reflected by an improvement in the EBITDA to finance cost coverage ratio.


Capitalization

At end-Jun25, the leverage of the Company decreased to 73.00% . The Company’s equity base increased on a year-on-year basis, reflecting an overall strengthening of its capital position.
 
 

Apr-26

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Madiha International (Pvt.) Limited


Rating Scale

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Apr-26

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Madiha International (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))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    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))
    5. PACRA ensures that the analysts or any of their family members shall not buy, sell, or engage in any transaction in any security which falls in the analyst’s area of primary analytical responsibility. This clause, however, does not apply to investments in securities through collective investment schemes. (Chapter III; 12-2-(l))
    6. PACRA has established policies and procedures governing investments and trading in securities by its employees and for monitoring the same to prevent insider trading, market manipulation, or any other market abuse. (Chapter III; 11-B-(g))
  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    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))
  7. Proprietary Information
    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

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