Muhammad Fahad Iqbal
PACRA Maintains Entity Ratings of E-Vision Manufacturing Limited
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.
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).