Press Release

VIS Reaffirms Entity Ratings of Muller & Phipps Pakistan Private Limited

Karachi, December 31, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Muller & Phipps Pakistan Private Limited (M&P) at ‘A+/A-1’ (Single A plus /A-One). Outlook on the assigned ratings is stable. Previous rating action was announced on December 31, 2018.

The assigned ratings incorporate M&P’s leading market position, diversified operations, sizeable customer base and sound distribution infrastructure. Ratings also take into account Company’s adequate business and financial risk profile and sound corporate governance infrastructure which is supported by a well-designed organizational structure and adequate IT platform.

M&P’s business risk profile is supported by diversified operations, stable demand outlook for different segments and exposure to top-tier clients. These positive factors are impacted by fragmented and competitive nature of the distribution industry resulting in low margins for industry players. However, increasing topline for large national level industry players partly facilitates in absorbing rising cost of doing business. Assessment of financial profile incorporates strong double digit growth in revenues and elevated leverage indicators. Given improvement in working capital cycle and resultant reduction in short-term borrowings along with higher equity base, leverage indicators have depicted improvement on a timeline basis.

Net sales of the Company have grown at a CAGR of 18.8% over the last 3 years (2015-2018). Growth momentum in sales has continued in 2019 and is expected to sustain in 2020 given addition of new principals and organic growth in sales of existing principals. In the backdrop of pressure on margins, increase in revenues is expected to remain the key profitability driver for M&P. Ratings remain dependent on maintaining sound cash flow profile, healthy debt servicing cushion and prudent leverage indicators.

M&P enjoys extensive outreach through its widespread and growing network of locations comprising of central warehouses, depots and service centers and vast coverage of retail customers. M&P’s operations are diversified into a range of segments including pharmaceuticals, telecommunications, health care and consumer. Besides distribution, M&P also has investments in companies that complement and support its operations.

For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext: 201) at (021) 35311861-66 or email at

Javed Callea

Applicable Rating Criteria: Industrial Corporates (May 2016

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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