Press Release

VIS Maintains Entity Ratings of Kompass Pakistan Private Limited

Karachi, January 31, 2024: VIS Credit Rating Company Limited (VIS) maintains entity ratings of Kompass Pakistan (Pvt.) Ltd. (“KPL’’ or “the Company”) to 'BBB+/A-2' (‘Triple B Plus/A-Two’). Medium to long term rating of 'BBB+' indicates adequate credit quality; protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. Short-term rating of 'A-2' indicates good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings has been changed to ‘Positive’ from ‘Stable’. Previous Rating action was announced on March 17, 2023.
Kompass Pakistan (Pvt.) Ltd. is a family-owned business, which specializes in producing flexible packaging materials such as wrappers and laminated bags for the FMCG industry. With two fully integrated facilities in Karachi, they extrude polyethylene films and laminate locally sourced materials, focusing on flexographic printing technology.
Rating take into account the moderate business risk profile of the Company, supported by limited competition and significant market presence in the industry. Moreover, relatively stable demand from renowned FMCG companies backed by increasing population and evolving consumer preferences was also a consideration. However, availability and cost of raw material like polymer exposes the Company to exchange rate fluctuations and price volatility
Change in outlook incorporates the topline growth and improved gross margins, given economic challenges faced in FY23. Net margins were constrained due to escalating finance costs. In terms of capitalization, while leverage remains elevated, improvements in gearing ratios over the years indicate a positive trend. The liquidity profile remains adequate, with slight improvements in the current ratio, while the coverage profile continues to be healthy, with further improvements reported in the Debt Service Coverage Ratio in 1HFY24. A consolidation of the positive trends going forward would be important from the rating perspective,
Going forward, ratings will remain sensitive to the Company’s ability to continue strengthening its capitalization profile. Moreover, maintenance of the profitability, coverage and liquidity profile in line with assigned ratings will also remain important considerations for future reviews.
For further information on this ratings announcement, please contact Mr. Saeb Muhammad Jafri (Ext: 202) or the undersigned (Ext: 208) at 021-35311861-64 or email at

Syed Asif Ali
Executive Director

Applicable Rating Criteria:
Industrial Corporates
VIS Issue/Issuer Rating Scale

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