PACRA Revises the Rating of TPL Trakker Limited | Sukuk

TPL Trakker Limited has a longstanding role in Pakistan’s vehicle tracking industry, supported by a diverse product portfolio and a long operational history. During its operations, the Company has shifted from being a conventional vehicle tracking provider to offering technology based solutions. Over time, the Company has evolved from a conventional vehicle-tracking provider into a technology-driven solutions company offering Telematics, IoT, Mapping, Data Analytics, and multiple adjacent services. It has introduced solutions in fuel management, smart energy management, cold-chain monitoring, fleet management, AI-enabled video surveillance, and automated fuel terminals. The country’s tracking and telematics industry continues to expand as demand strengthens for logistics visibility, fuel efficiency, and asset security. However, operators face constraints arising from high operating costs, reliance on imported equipment, and fluctuations in the automobile segment. These factors make it difficult to forecast demand patterns and limit the pace at which industry participants can scale their operations. Within this context, the Company’s efforts to broaden its offering and enter new technology domains represent a long-term opportunity, but the benefits are expected to materialize gradually rather than offset immediate revenue pressures. In FY25, revenue declined by ~30% year-on-year, primarily due to the completion of a major customer contract and the reclassification of Astra from subsidiary to associate, which reduced consolidated topline. Margins contracted across all levels, with the net profit margin turning negative at –3.9%. The revision in rating reflects the Company’s weakened financial risk profile, as the operational progress has not yet translated into sustainable financial performance, Also Sukuk payments (Principal + Interest) of September 25, have been delayed to some investors. Liquidity remains under pressure due to elevated working capital needs, while coverage and cash flows are modest. The capital structure remains leveraged, comprising both 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 (TPLTL) is a publicly listed company, majority owned by TPL Corp Limited with a shareholding of ~64%. The Company operates as a leading telematics and technology solutions provider. Its core business includes vehicle and container tracking, fleet management, data analytics, and digital mapping services, along with a range of integrated technology-based monitoring solutions.

About the Instrument
TPL Trakker Limited has issued a secured, OTC listed & Privately placed Sukuk (Sukuk) amounting to PKR 1.25bln in March, 2021. The Sukuk carried a profit rate of 3MK + 300bps with a tenor of five (5) years. The purpose of the Sukuk is to meet the Company's working capital requirement, investment in group companies, and partial debt repayment. The Sukuk will be redeemed after eighteen (18) equal quarterly payments in March, 2026. As per client representation, the estimated amount is maintained in both FPA and FRSA accounts. By the end of June '25, sixteen principal installments totaling PKR 1,042mln out of PKR 1,250mln have been successfully paid. The most recent payment, comprising PKR ~69.4mln in principal and PKR ~14.05mln in markup, was made at the end of June '25. However as per management representation, September 2025 quarter payment (Principal + Interest) is delayed and is expected to be fully settled by end of December 2025.