Press Release
VIS Upgrades Short-Term Entity Ratings of HKB Retail (SMC Pvt.) Limited
Karachi, April 07, 2026: VIS Credit Rating Company Limited (VIS) has upgraded short-term entity ratings of HKB Retail (SMC Pvt.) Limited (HKB) from ‘A-/A3’ (Single A Minus/A Three) to ‘A-/A2’ (Single A Minus/A Two). The 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’ denotes good likelihood of timely repayment of short-term debt obligations with sound liquidity factors. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on February 18, 2025.
HKB Retail (SMC – Private) Limited (‘HKB’ or ‘the Company’) is a single-member company owned by Mr. Shehryar Ahmed Buksh. The Company is part of the HKB Group, comprising H. Karim Buksh Enterprises (AOP) and H. Karim Buksh (Pvt.) Limited. HKB is principally engaged in retail and e-commerce of apparel, shoes and accessories. In 2010, Mr. Shehryar developed two brands, namely, ‘Beechtree’ and ‘Beechtree Kids’ catering to the apparel needs of women and children, respectively. In 2021, the Company launched its first online brand ‘Morbagh’ which has since been merged into ‘Beechtree’. The Company currently operates 23 retail outlets spread across 13 cities including Lahore, Karachi, Islamabad and Peshawar with their registered office located in Peshawar.
The Pakistani retail clothing sector, including ready-to-wear, home textiles, and fashion apparel, serves domestic consumers and the overseas diaspora through stores and growing online channels, with demand supported by urbanization, demographics, and branded Pret preferences. After FY23’s peak inflation of 38% and 4.4% trade contraction, the sector is normalizing in early FY26, with headline inflation at 7.0% and core inflation at 7.6%, and wholesale and retail trade expected to grow 3.75%-4.75%. Tier-1 retailers benefit from scale and vertical integration but face high fixed costs, seasonal revenue concentration, the GST increase from 15% to 18%, delayed refunds, and persistent input costs. With ~88% digital payment adoption and effective working capital management, retailers maintaining high inventory turnover are well-positioned in a ~USD 5.88 billion market under the Normal Tax Regime.
The assigned ratings reflect HKB’s established brand presence in the women’s apparel segment and sustained focus on the higher-margin Pret line, which has helped stabilize revenue despite moderate contraction in volumes. Higher average selling prices partially offset the decline in volumes and supported gross margins, while net margins benefitted from reduced finance costs and taxation. The Company’s capital structure remained moderately leveraged, with short-term borrowings comprising the bulk of the debt profile. Debt coverage ratios improved underpinned by lower finance costs, while liquidity remained adequate relative to higher working capital requirements. Going forward, improvement in liquidity and revenue stability will remain key credit considerations.
For further information on this rating announcement, please contact at (021) 35311861-4 or email at info@vis.com.pk
Applicable Rating Criteria: Corporate
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf