The Pakistan Credit Rating Agency Limited
Press Release


Ahmad Faraz Arif

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PACRA Maintains Entity Ratings of Ismail Industries Limited

Rating Type Entity
(10-Dec-21 )
(14-Dec-20 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

The ratings reflect Ismail Industries Limited’s ('Ismail Industries' or ‘the Company’) strong presence in confectionery, biscuits and plastic film manufacturing through established brands (Candyland, Bisconni, Snackcity and Astro Films). Growing middle class, coupled with timely capacity enhancements, have led to significant growth in revenues of the Company in the recent past. The ratings draw strength from the Company’s diversified revenue stream, supported by the plastic film manufacturing segment. The Company has been able to sustain growth in revenues, owing to aggressive marketing campaigns and introduction of new food products despite challenges faced by the Company amidst the pandemic. The Company's expansion projects were met by delays; However, sustained growth momentum and increase in export and local sales, highlights the Company's strong business profile. The Company's margins remained strong at the gross level, despite cost-push inflation and rupee depreciation. However, higher share of profit was received from the associate company resulting in significant growth in the bottom-line. The Company having relatively high market share and brand recognition is anticipated to sustain the growth momentum. Furthermore, Ismail Industries’ strategic investments in its associated companies is expected to further provide additional cushion to the bottom-line, going forward. Meanwhile, despite a leveraged capital structure, the Company maintains a strong financial profile, through strong working capital management and adequate coverages.
The ratings are dependent on continued revenue growth and maintenance of margins. Prudent management of expansion and investment-related debt in order to meet financial obligations will be important. Decline in coverages and/or erosion of margins may adversely impact the ratings.

About the Entity
Ismail Industries Limited, incorporated in 1988, is a public listed company. The Company operates with nine production facilities concentrated at three locations. The Company’s major business lines are confectionery, snacks, biscuits and plastic films. Major shareholding of the company lies with Ismail Family (~99%), through Mr. Muhammad Ismail (~16%), Ms. Almas Maqsood, wife of Mr. Maqsood Ismail, (33%), Mr. Miftah Ismail (31%), Mr. Ahmed Muhammad (~15%) and associates (~4%). Mr. Muhammad Ismail is the Chairman of the Board. He has over 3 decades of experience of confectionery industry.
The overall control of the Company vests with seven Board members. There are two executive, three non-executive and two independent directors on the Board. Four Board members are from the sponsoring family. The CEO, Mr. Munsarim Saifullah, has over two decades of experience in confectionary sector. He is supported by an experienced management team.

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.