PACRA Upgrades the Entity Ratings of Madiha International (Pvt.) Limited

Madiha International (Pvt) Limited (the "Company") is primarily engaged in the import and trading of printer papers. The recent rating upgrade reflects significant topline growth, an expanded customer base, and a low-leverage capital structure. Additionally, the sponsors’ commitment to providing financial support when needed further strengthens the Company’s ratings. With extensive expertise in paper trading, the sponsors have established themselves as key players in Pakistan’s imported paper market. The Country's paper industry consists of commercial importers, manufacturers, and converters. Madiha International is a leading commercial importer, operating under the brand name "BLC, PPC, IK Copy logo". Its supply chain is well-integrated and managed through its dedicated intender, International Business Management. In FY24, the Company reported a robust topline of ~PKR 2,318mln, driven by increased volumetric sales and a strengthened customer base, compared to ~PKR 2,041mln in FY23. Its clientele remains stable, primarily consisting of high-quality corporate clients, including leading banks. Despite challenges such as inflation and import duties, the Company successfully improved its profit margins. The gross profit margin increased from ~9.9% in FY23 to ~10.7% in FY24, while the operating profit margin rose from ~9.4% in FY23 to ~9.9% in FY24.
The Company's financial profile remains solid, with moderate leverage, as it primarily relies on internally generated cash from its sponsors, ensuring financial stability without excessive debt.
The rating is dependent on sustaining its market share and prudent management of the working capital. While maintaining sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will impact the ratings. Moving forward, improvement in the governance and management framework remains of vital importance.

About the Entity
Madiha International (Pvt.) Limited was established in 2016 as a private limited Company, registered with the Securities and Exchange Commission of Pakistan (SECP) under the Companies Act, 2017. Headquartered in Karachi, the Company operates as part of a family-owned business group. Ownership is divided among four shareholders, each holding a 25% stake: i) Mr. Usman Saleem Bikiya, ii) Mr. Muhammad Bilal, iii) The remaining 50% is held by other family members.
The Board of Directors (BoD) consists of three members. Mr. Muhammad Bilal, serving as the CEO, oversees the Company’s financial matters and provides external advisory support. Mr. Usman Bikiya is one of the Company's directors.