Press Release

VIS Reaffirms Entity Ratings of DWP Technologies (Pvt.) Limited

Karachi, June 07, 2024: VIS Credit Ratings Company Ltd. (VIS) has reaffirmed entity ratings of DWP Technologies (Pvt.) Limited (‘DWPTL’ or ‘the Company’) at A-/A-2 (‘Single A Minus/A-Two’). Medium to long Term Rating of ‘A-’ reflects good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. 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. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on August 18, 2023.

DWPTL was incorporated on February 19, 2003, as a private limited company in Pakistan under the Companies Ordinance, 1984. The manufacturing facility and Head Office is in Lahore, from where all the activities are managed. The principal activity of the Company is the manufacture and sale of Industrial I.T. and related electronic equipment and products. The registered office of the Company is situated at 1st floor, Room 11, Mandviwala Chambers, Talpur Road, Karachi in the province of Sindh, Pakistan.

Assigned ratings incorporate the business risk profile, which is exposed to foreign exchange and currency transfer risks, constrained by persistent Pakistani Rupee depreciation against the greenback. Additionally, the sector faces challenges due to depleting foreign exchange reserves, exchange rate volatility, and import restrictions, impacting volumes.

Assigned ratings also incorporate the profitability, capitalization, liquidity, and coverage profiles. The profitability profile reflects constrained revenue due to import restrictions, resulting in a decline in the topline, while gross margins improved primarily from inventory gains in FY23. The capitalization profile indicates adequacy with a reduction in short-term borrowings in FY23, although there was a moderate increase in gearing and leverage indicators in 9MFY24. The liquidity profile is adequate. Lastly, the coverage profile remained healthy, with improvement in debt service coverage and sufficient short-term debt coverage in FY23 and 3QFY24, despite constrained quantum of profitability.

Going forward, ratings will remain sensitive to the Company’s ability to strengthen its internal controls framework and maintain its key financial metrics to be commensurate with assigned ratings.

For further information on this ratings announcement, please contact 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

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