Press Release

VIS reaffirms Entity Ratings of Ali Gohar & Company (Private) Limited
 

Karachi, July 08, 2020: VIS Credit Rating Company Ltd. has reaffirmed entity ratings of Ali Gohar & Company (Private) Limited (AG&C) at ‘A/A-2’ (Single A/A-Two). Outlook on the assigned rating is ‘Stable’. The long term rating of ‘A’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short term rating of ‘A-2’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. The previous rating action was announced on September 28, 2018.

AG&C is principally engaged in distribution of goods and services. The Company operates in three segments including pharmaceutical, medical devices and consumer goods. The assigned ratings take into account AG&C’s position as one of the leading national level distribution companies in the country. Ratings take into account AG&C’s low business risk profile and sound distribution infrastructure and controls. Overall corporate governance framework is supported by stable and professional management team and sound IT infrastructure. Ratings also reflect the Company’s sound financial profile as reflected by low leveraged capital structure, conservative financial policy and adequate liquidity profile. Ratings remain dependent on maintaining low leveraged capital structure while further strengthening market position and profitability profile.

Net Sales increased by 21% during FY19 with growth largely being a function of existing principals and full year impact of new principals added in FY18. Organic growth from existing principals and new client additions are expected to result in double digit increase in sales in FY20. However, growth in topline has not translated into increase in profitability during FY19 due to decline in gross margins, higher finance cost and effective tax rate.

For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext: 306) at (021) 35311861-66 or email at info@vis.com.pk








Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf

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VIS Credit Rating Company Limited