The Pakistan Credit Rating Agency Limited
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PACRA Assigns Initial Entity Ratings to E-Vision Manufacturing Limited

Rating Type Entity
Action Initial
Long Term BBB
Short Term A2
Outlook Stable
Rating Watch -

The ratings reflect adequate business profile of E-Vision Manufacturing Limited and its established position in the regenerated polyester staple fiber industry. The company has identified a niche in the textile industry by manufacturing fine white, black and green regenerated polyester staple fiber using post-consumed polyethylene terephthalate (PET) bottles. The company’s topline, though small in size, has displayed rising trend. Recent venture into export market is expected to grow revenues. Margins have remained volatile owing to fluctuations in global oil prices, a key factor impacting product price. Impact of new entrants and seasonal constraints limit availability of raw material, posing a challenge to the company’s working capital management and optimal capacity utilization. Margins have shown improvement in CY18 on the back of better procurement of raw material through imports and local market. Bottomline remains small and has shown an unstable trend. The company’s financial risk profile remains strong with no long-term borrowings. This is supported by improving cashflows and strong coverages. The company’s overall governance structure and financial transparency need improvement.

The ratings are dependent on anticipated growth in topline and stability of margins. Sustained high coverages and maintaining leveraging at low levels remains critical. Going forward, better governance framework will be ratings positive. Prolonged downturn in margins and/or coverages will adversely impact ratings.

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 (85%) is held through an offshore investment company, Marylebone Management Limited, incorporated in the British Virgin Islands and owned wholly by Mr. Salman Ganny. Remaining shareholding (15%) rests with Mr. Abdul Ghaffar (CEO).

The company’s Board comprises three members. The position of Chairman in E-Vision is held by Mr. Ganny. Mr. Abdul Ghaffar and Mr. Arif Siddiqui (CFO) are also on the Board. Mr. Abdul Ghaffar is a Chartered Accountant with over twenty years of experience in various manufacturing concerns and expertise in setting up industrial plants. He is supported by a team of seasoned 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.