Press Release

VIS Reaffirms Entity Ratings of Muller & Phipps Pakistan Private Limited

Karachi, June 14, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Muller & Phipps Pakistan Private Limited (M&P) at ‘A+/A-1’ (Single A plus /A-One). Outlook on the assigned ratings is ‘Stable’. Long term rating of ‘A+’ reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-1’ signifies high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors; and risk factors are minor. Previous rating action was announced on April 18, 2022.

Assigned ratings continues to draw support from M&P’s leading market position in the distribution industry, established and diversified principal base and business sectors, sizeable infrastructure, sufficient resources and extensive outreach with nation-wide distributional coverage. Ratings also take note of healthy growth in topline, sound capitalization metrics coupled with sound corporate governance infrastructure encompassing a well-designed organizational structure and adequate IT platform.

Business risk profile draws support from its diversified principal base and business segments, established long-term relationships with top-tier principals and demand stability given that the pharmaceutical segments dominating the revenue mix. However, the distribution industry remains fragmented and competitive, thereby construing into low margins. Similarly, pricing power also remains limited. Assessment of financial profile reflects contraction in Company’s margins and increasing debt servicing burden. Particularly, telecom segment has come under distress given the operational bottlenecks faced by the mobile assemblers on the back of import curtailment measures by Government of Pakistan amid low foreign reserves, coupled with rising inflation as well as rupee devaluation. Going forward, while topline of the pharma industry is expected to increase with volume increases and new principal additions, regulatory pricing limitations, deteriorating economic conditions marked by high inflation and policy rate, Pak Rupee devaluation, and high energy cost remain challenges for the Company. The assigned ratings will continue to weigh on the Company’s business growth and financial risk profile.

M&P has established its nationwide presence through its widespread and growing network of 135 locations comprising central warehouses, depots, service centers and vast coverage of customers. During the period under review, total 7 new locations were added. The logistics function uses a balanced mix of rented and owned vehicles for efficient delivery to retail outlets & wholesale market. During last three years, management’s focus has been geared towards liquidation of inventory at higher pace and rationalizing market receivables, thereby improving its working capital cycle. Ratings remain sensitive to achievement of projected plans and improvement in margins and gearing levels.

For further information on this rating announcement, please contact Mr. Shaheryar Khan (Ext: 209) or the undersigned (Ext: 207) at (021) 35311861-64 or email at

Sara Ahmed

VIS Entity Rating Criteria: Corporates (May 2023)

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