Sohail Ahmed Qureshi
PACRA Maintains Entity Ratings of Panther Tyres Limited
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 and has recently entered into segment of trucks and buses tyres. 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. Further, role of Chairman and CEO has been segregated and four new independent directors have been elected on the board to strengthen the governance of the company. 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. Despite Covid19 outbreak with associated lockdown period the company managed to sustain its growth in revenues and margins during FY20. 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.
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.
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 seven members’ Board of Directors. Two are executive directors, including the chairman, one is a non-executive member of the sponsoring family and remaining four are independent directors. Mian Faisal Iftikhar is the CEO of the company and is supported by a team of qualified and experienced professionals.