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The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Dec-18

Analyst
Muhammad Nadeem Sheikh
nadeem.sheikh@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of Panther Tyres Limited

Rating Type Entity
Current
(27-Dec-18)
Previous
(29-Jun-18)
Action Maintain Maintain
Long Term A- A-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

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. The sponsors have built a strong management team with a wholesome mandate: roles are clearly demarcated with high degree of delegation. The company intends to improve its overall organisation structure and inculcate financial transparency as per Code of Corporate Governance. Latest evidence is the appointment of a professional in the position of the CEO. Margins are sanguine though slightly constrained during FY18 due to increase in prices of raw material. The company is strengthening its international presence. The ratings draw comfort from strong coverages coupled with adequate capital structure. Going forward, the demand from replacement market is expected to remain strong whereas the OEMs' demand is expected to contract due to increased prices.
The ratings are dependent on the management's ability to sustain its business profile with careful management of market risks, increase in international outreach and improvement in governance structure.

About the Entity
Panther Tyres Limited is an unquoted public limited company incorporated in 1983. The Company is primarily engaged in the production of tyres and tubes of vehicles. Panther is the pioneer in the motorcycle tyre manufacturing industry of Pakistan. The company sells its product with the brand name “Panther” and it has since been renowned for quality products. These products are not only sold in the replacement market but also supplied to the original equipment manufacturers of motorcycle, rickshaw and tractors.

Mr. Mian Iftikhar Ahmed-a renowned businessman, along with his family owns the entire shareholding of the Company. He has served as the chairman of All Pakistan Tyres & Tubes Manufacturing Association. The overall control of the Company vests in three members’ board of directors. Two are executive directors, including the chairman, and one is a non-executive member of the sponsoring family. Mr. Naveed A. Khawaja is the new CEO of the company; he has replaced Mr. Mian Iftikhar Ahmed. He is supported by a team of qualified and experienced professionals.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.