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The Pakistan Credit Rating Agency Limited
Press Release

Date
01-Mar-19

Analyst
Faraan Taimoor
faraan.taimoor@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 Assigns Initial Ratings to Loads Limited

Rating Type Entity
Current
(01-Mar-19)
Action Initial
Long Term A
Short Term A1
Outlook Stable
Rating Watch -

The ratings reflect the strong industry positioning of Loads Limited in its respective niche. With a presence of up to four decades in the automotive industry, the company has established a formidable forte in the domestic market along with a committed client base. The company employs its specific business model i.e. working through subsidiaries catering to the current product suite, Multiple Autoparts Industries (Private) Limited and Specialized Autoparts Industries (Private) Limited. Loads Limited has nurtured its relationship over the years with the OEMs, providing comfort to the ratings.The company has an admirable market share (~95%) in the sales of exhaust system, strength in this segment emanates from exclusive agreements signed with the leading OEM’s (Suzuki, Toyota and Honda) in the country and technical collaborations with international players. The company is gearing towards further diversification and venturing into manufacturing of Alloy Wheels. A new subsidiary, Hi-tech Alloy Wheels Limited, has been formed for the upcoming project. Commercial production is expected towards the end of the year. The company intends to go for an IPO to partially finance the new project. Loads Limited has witnessed reduction in the margins and bottom-line as a result of investments in the new wheels project. Respite is on the horizon as evidenced by the latest reported numbers. Short term borrowings have inflated, an outcome of its need to fund its initiatives. The company intends to engage new automotive players emerging in the industry to increase its business volumes.

The ratings are dependent on the management's ability to sustain the financial risk profile while embarking into the new business venture. Maintaining market share in all segments remain crucial.

About the Entity
Loads Limited was established in 1979 as a private limited company. The company was converted to a public limited company in 1994 and was listed on Pakistan Stock Exchange in 2016. The company is engaged in the manufacturing of auto parts for passenger cars, buses and trucks while also participating in the spare parts market. The auditors for the company, KPMG Taseer Hadi & Co, expressed an unqualified opinion on the latest financial statements.

Sponsored by Treet Corporation Limited, a vast conglomerate dealing in razor blades, soap and motor cycles, the company has a nine-member board of directors. The board comprises of four Non-Executive Directors including the Chairman, Mr. Syed Shahid Ali and the Vice Chairman, Mr. Saulat Said. The CEO - Mr. Munir K. Bana, a Chartered Accountant, has been associated with the company over two decades. An able management team assists him.

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.