Press Release

VIS assigns initial Entity Ratings to Inbox Business Technologies Limited

Karachi, March 18, 2020: VIS Credit Rating Company Ltd. (VIS) has assigned initial entity ratings of ‘BBB-/A-3’ (Triple B Minus/A Three) to Inbox Business Technologies Limited (IBTL). Medium to long-term rating of ‘BBB-’ denotes adequate credit quality; protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. The short term rating of ‘A-3’ indicates satisfactory liquidity and other protection factors, which qualify entity as to investment grade. Outlook on the assigned ratings is ‘Stable’.
Inbox Business Technologies Limited (IBTL) is engaged in the business of manufacturing and selling of IT equipment, software development and IT services. It is also engaged in provision of networking system solutions. IBTL is a wholly owned subsidiary of Patek (Pvt.) Limited, which is a private investment holding company with shareholding vested with family members of Dawood Group. The assigned ratings incorporate demonstrated support from the sponsor as evident from recent equity injection.
The assigned ratings also reflect satisfactory corporate governance framework, modest business risk profile, and adequate financial risk profile. Business risk profile of the company is supported by sizeable quantum of medium to long tenor contracts in hand, healthy contract renewal rate in two business segments, established market position and adequate barriers to entry. Sizeable long tenor contracts in hand ensure revenue visibility in the medium to long term. Availability of specialized human resource and significant geographic reach serve as barriers to entry, thereby providing competitive edge to IBTL. Client wise concentration in revenues, delay in payments from government projects and exposure to exchange rate fluctuations are considered key risk factors.
Assessment of financial profile indicates leveraged capital structure, low cash flow coverages and limited debt servicing cushion. However, comfort is drawn from reduction in quantum of loss on yearly basis with the company expected to post profit in the coming years. Improvement in net profitability can be attributed to cost reduction initiatives undertaken by the company. With continuation of such cost saving initiatives and realization of revenues from projects in hand, profitability profile is expected to improve going forward. Operating in a technology driven industry, the company is exposed to rapid innovations which require software and hardware upgrades entailing costs of skills development and equipment. Ratings remain dependent on realization of projected revenues and cash flows along with improvement in leverage indicators and debt servicing cushion going forward.
For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) 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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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