PACRA Maintains the Entity Ratings of Hyundai Nishat Motor (Pvt.) Limited

Hyundai Nishat Motor (Pvt.) Limited (HNMPL) is a joint venture of Nishat Group, SOJITZ Corporation (Japan), and Millat Tractors Ltd., backed by strong financial and industry expertise. The involvement of Nishat Group—one of Pakistan’s most prominent business conglomerates—alongside Sojitz Corporation, a leading Japanese general trading company with expertise in automotive parts manufacturing and trading, reinforces confidence in the Company’s ownership structure and strategic direction. HNMPL's core operations encompass the assembly and distribution of a diverse range of Hyundai-branded vehicles in Pakistan, including passenger cars, light commercial vehicles, and vans. HNMPL targets the premium segment, offering C-segment (Elantra, Tucson), D-segment (Sonata, Santa Fe), and Pickup (Porter) in the CKD category. In the CBU category, it provides fully electric vehicles, including the IONIQ 5 (Compact Crossover SUV), IONIQ 6 (Mid-size Fastback Sedan), and Hyundai Staria (Multi-Purpose Vehicle). To meet the growing demand for hybrid vehicles, HNMPL introduced the Santa Fe (7-seater SUV) and Pakistan’s first locally assembled hybrid sedan, the Elantra Hybrid. Additionally, it expanded its portfolio with the Sonata N Line. HNMPL’s board consists of seasoned professionals with extensive industry expertise, providing strategic guidance and oversight. Supported by a skilled management team, they ensure the efficient execution of the Company's operations. Pakistan’s automotive sector has witnessed significant growth, driven by improvements in macroeconomic conditions, including exchange rate stability, lower policy rates, and reduced inflation. According to the latest statistics from the Pakistan Automotive Vehicle Manufacturing Association (PAMA), the passenger car segment recorded sales of 58,266 units, reflecting a remarkable 52% increase during 7MFY25 (July 2024 to January 2025) compared to the same period last year. The Jeeps & Pickups segment also exhibited substantial growth of approximately 67%, with 19,301 units sold, up from 11,525 units in 7MFY24. Among HNMPL's product offerings, the Tucson is classified as the best-selling model, followed by the Porter, Santa Fe, Elantra, Sonata, Staria, and IONIQ models. As per the management accounts provided by HNMPL, the Company’s revenue grew by 27% in CY24, while sales volumes increased by ~11%. Although gross and operating margins experienced slight dilution, the net profit margin remained stable at 2.5%. HNMPL’s financial risk profile is considered good, characterized by strong coverage ratios, stable cash flows, and a working capital cycle aligned with industry norms. The Company maintains a leveraged capital structure, with borrowings primarily allocated to long-term investments aimed at supporting its Balancing, Modernization, and Replacement (BMR) initiatives.
The ratings are dependent upon sustainability in the Company’s revenue growth, profitability margins, and upholding a strong financial matrix. The ability of the Company’s Cashflows to meet the operating expenses of the Company is considered pivotal. Sponsors’ support remains imperative for the ratings.

About the Entity
HNMPL, a private limited company incorporated on March 3, 2017, under the Companies Act, 2017, is jointly owned by Nishat Group (44.14%), SOJITZ Corporation (40.0%), and Millat Tractors Ltd. (15.86%). The board comprises seven members, including one executive and six non-executive directors, chaired by Mr. Mian Hassan Mansha, with Mr. Masaaki Yamada serving as CEO.