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The Pakistan Credit Rating Agency Limited
Press Release

Date
16-Jan-20

Analyst
Muhammad Fahad Iqbal
fahad.iqbal@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 E-Vision Manufacturing Limited

Rating Type Entity
Current
(16-Jan-20)
Previous
(17-Jul-19)
Action Maintain Maintain
Long Term BBB BBB
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The ratings reflect the 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 declining trend attributed to withdrawal of zero rated tax policy. 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 recently shown improvement 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 declining trend 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 (~60%) 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 (~40%) rests with Mr. Abdul Ghaffar (CEO).

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.