Press Release
VIS Maintains Entity Ratings of Orient Electronics (Private) Limited
Karachi, May 09, 2025: VIS Credit Rating Company Limited (VIS) maintains entity ratings of Orient Electronics (Pvt) Limited at ‘A-/A2’ (Single A minus/A two). Medium to long term rating of ‘A-’ indicates Good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A2' indicates Good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings has been revised to ‘Stable’ from ‘Negative’. Previous rating action was announced on May 23, 2024.
Orient Electronics (Private) Limited (‘OEL’ or ’the Company’) was incorporated on August 23, 2005. The principal activities of the Company include manufacturing, assembling and sales of all types of air conditioners, refrigerators, deep freezers, LED TVs, water dispensers, microwave ovens, and other home appliances. The factory and registered office of the Company are located at 26-KM, Multan Road, Lahore.
The assigned ratings take into account the medium to high business risk profile of household appliances’ industry characterized by significant exposure to cyclicality and exchange rate fluctuations. Demand is generally tied to per capita income, urbanization, technological advancements, and seasonality, which during FY24 has remained weak. However, some signs of recovery emerged, with ease in import restrictions and improvement in macroeconomic conditions since beginning of FY25.
The change in outlook incorporates OEL’s improving financial risk profile which is supported by the rebound in sales and profitability during FY24 and HY25. Company’s capital structure improved in line with debt repayments and lower reliance on short term borrowings as a result of Company’s strategic shift to trade contracts from LC which has also reduced working capital cycle, supporting liquidity profile. Consequently, debt coverages have also improved, albeit remaining lower than historic levels. Going forward, comparatively better macroeconomic conditions is expected to support demand future demand. Nevertheless, sustaining sales growth, maintenance of profitability indicators and further improvement in coverages will remain important from the rating perspective.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf