The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains Entity Ratings of Panther Tyres Limited

Rating Type Entity
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 company has a strong distribution network and longstanding relationships with Original Equipment Manufacturers (OEMs). The sponsors have built a strong management team with a wholesome mandate: roles are clearly demarcated with a high degree of delegation. The company has improved its overall organisation structure and is inculcating financial transparency as per Code of Corporate Governance. Revenue stream is segmented into OEMs and Replacement Market (RM),wherein RM has a higher inclination. The company's financial risk profile is demonstrated by stable margins, healthy coverages and adequate capital structure. During FY19 the company has largely held its gross margins whereas there is a slight dilution in net profit, adjusted for one off gain in the last year. The company has presence in the international market. Going forward, demand from RM is expected to provide continued cushion whereas the OEMs demand will be subject to multiple challenges.
The ratings are dependent on the management's ability to sustain its business profile with cautious 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.

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 Manufacturers 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. Mian Iftikhar Ahmed is the Chairman & CEO of the company and 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.