PACRA Maintains Entity Ratings of TPL Trakker Limited

The ratings reflect TPL Trakker's ("the Company") leading position in Pakistan's vehicle tracking industry, supported by its diverse product portfolio and strong technological infrastructure. As a pioneer with over two decades of experience, the Company has successfully diversified its offerings, providing customized solutions across various clients and sectors. This strategic approach has secured its competitive edge and leadership in Telematics, Tracking, IoT, Maps, and Data Analytics. Vehicle tracking and monitoring remain pivotal for revenue generation. Previously the industry faced challenges from high interest rates and rising production costs in the automotive sector, which have impacted the telematics market, to combat this, the Company has strategically expanded its presence in IoT by offering advanced solutions and analytics. The Company has also diversified revenue streams into fuel management solutions, smart energy management, cold chain monitoring, water level monitoring, fleet management, AI-based vehicle video surveillance, smart farm management, and automated fuel terminals. Pakistan’s vehicle tracking industry is evolving rapidly, driven by advancements in IoT and telematics. A reduction in policy rates is expected to boost demand for new vehicles. Strategic partnerships and technological advancements remain essential for the Company’s sustained growth and long-term success. Moreover, the expansion of digital commerce, coupled with CPEC projects and the development of special economic zones, presents significant opportunities. Trakker Middle East (TME), a subsidiary, secured equity investment from Gargash Enterprises LLC to support its growth strategy. This partnership will enable TME to expand into new MENA (Middle East & North Africa) markets, fostering synergies and enhancing the technological capabilities of both entities. On the digital mapping front, Astra Location Services Private Limited (Astra), a wholly owned subsidiary, continues to grow its customer base through expanded product offerings, strengthened data collection infrastructure, and strategic partnerships. Astra has successfully onboarded corporates, SMEs, and startups. The development of its SaaS platform is progressing and is expected to drive operational synergies. Operationally, multiple revenue-generating avenues are nearing completion, with most capital expenditure already incurred. The sponsors possess a deep understanding of the business and the Company benefits from experienced management. During FY24, the Company achieved ~13% revenue growth, driven by price inflation in Trakker’s rental income and improvements in monitoring, surveillance, and mapping segments. Margins improved across all levels, resulting in a net profit margin turnaround of ~5.3%, compared to a loss of -1.9% in FY23. The financial profile reflects a stretched working capital cycle, modest coverages, and cash flows. The capital structure remains leveraged, with a mix of short-term and long-term borrowings.
The ratings depend on the successful conversion of upcoming ventures into sustainable revenue streams, supported by positive performance indicators such as maintaining adequate cash flows, profits, and margins as outlined in the financial projections. Additionally, adherence to financial discipline remains critical for the ratings.

About the Entity
TPL Trakker Limited (TPLT) – is a publicly listed Company that is majorly (64%) owned by TPL Corp Limited. TPLT is a telematics and IoT solutions provider and the core business comprises mainly of vehicle and container tracking, fleet management, IoT solutions and Digital mapping services. BoD of the Company comprises eight members, headed by the Chairman Mr. Jameel Yusuf. Mr. Amjad Waqar is the new CEO of the Company.