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The Pakistan Credit Rating Agency Limited
Press Release

Date
29-Aug-23

Analyst
Muhammad Atif Chaudhry
Atif.Chaudhry@pacra.com
+92-42-35869504
www.pacra.com

Applicable Criteria

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Disclaimer
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 the entity rating of Golden Packages (Pvt.) Limited

Rating Type Entity
Current
(29-Aug-23 )
Previous
(29-Aug-22 )
Action Maintain Initial
Long Term BBB BBB
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Golden Packages (Pvt.) Limited (“GPL’’ or “the Company”) is predominately manufacturing Cast Poly Propylene (CPP) Films and flexible packaging. The demand for the product is derived mainly from the food industry and consumers. The strong customer base of the Company bodes well for the assigned rating. The Company is wholly owned by family members. The sponsor’s family has vast experience in packaging and engaged in this business since 1991. The raw material of the finished product is ~100% imported hence, exposed to exchange rate risk. As per management representation, the Company’s market share in the overall industry is ~30%, whereas, the Company is the major supplier of flexible packaging in the KPK region. Almost 70% of the total sales of the Company are made to KPK. The Company has expanded its capacity year by year, from ~2,700 MT/annum in FY20 to ~18,000 MT/annum tons in FY23, and going forward to meet the ongoing demand for the CPP Films, GPL recently imported a new plant, which will enhance the production capacity to 20,000MT/annum. The internal audit department is operating under the direct supervision of directors due to which the Company has an effective mechanism for the identification, assessment, and reporting of all types of risk arising out of the business operations. With no MIS system in place at GPL, the room for improvement concerning IT systems is massive, including the GPL’s website which is still in the developing phase.
On the financial profile side, the Company has generated a topline of ~ PKR 3,426mln during 9MFY23 as compared to ~PKR 3,240mln in 9MFY22 with an increase of ~5.7% (FY22: ~PKR 4,320mln, FY21: ~PKR 3,948mln). Consequently, the bottom line of GPL has increased to ~PKR 427mln from PKR 375mln during the same period (FY22: ~PKR 500mln, FY21: ~PKR 467mln). The equity of the Company clocked in at ~PKR 2,796mln at the end of Mar-23 (FY22: ~PKR 2,369mln, ~FY21: PKR 1,869mln). The financial position of the Company is low leveraged with sound financial indicators as of the end Mar’23. Past trends of equity injection show strong financial commitments of the sponsors.
The ratings are dependent upon the management’s ability to improve margins while sustaining its market share. Prudent management of the working capital, and maintaining sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will impact the ratings.

About the Entity
Golden Packages (Pvt.) Limited was founded as a private limited company in 2014 and began its operations in 2016 with the commercial production of Cast Poly Propylene (CPP) Films. In 2018, GPL has also started commercial production of Flexible Packaging. GPL’s manufacturing plant is located near Raiwind. The Company is wholly owned by sponsoring a family with major ownership residing with Mr. Shah Husain ~54%, Mr. Rehman Khan owns ~38% while Mr. Amir Sultan and Mr. Inam Khan owns ~6% and ~2% shares respectively. Mr. Rehman Khan is the CEO of the Company. He has over 10 years of relevant experience and also has an experience in senior management abroad. He is assisted by a team of qualified individuals.

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.