Press Release

VIS reaffirms entity rating of Digital World Pakistan (Pvt.) Limited

Karachi, July 19, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Digital World Pakistan (Pvt.) at ‘A-/A-2’ (Single A Minus /A-Two). The long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on June 30, 2021.

The assigned ratings of DWPL take into account sponsors’ industry experience, particularly in the end-to-end supply chain management, strong brand recognition and loyalty among customers in the consumer durable industry and long-standing business relations with vendors and dealers.

The ratings draw comfort from a significant uptick in sales during FY21 on the back of volumetric growth and rising prices. Gree ACs continue to account for a major proportion of revenue, followed by EcoStar TVs. Topline of the company closed over 20% higher than corresponding period in previous year and hence a YoY increase of over 20% is also projected for full year. Profitability indicators have also followed a similar pattern over the period. Improvement was observed in gross margins, as the company was able to successfully pass on higher raw material costs and freight charges to the customers because of its strong position in the market. This translated into higher net margins, despite a noticeable increase in distribution and selling costs in FY21 on account of advertising related expenditure.

Liquidity profile of the entity remains at an adequate level. Funds from Operation (FFO) of the company depicted improvement in FY21 on the back of higher profits with cash flow coverages being maintained at sufficient levels. A healthy growth in the equity base has improved leverage and gearing ratios in the review period. Maintaining capitalization indicators and cash flow coverages at similar levels over the rating horizon is considered important.

For further information on this rating announcement, please contact Ms. Asfia Aziz or the undersigned (Ext. 306) at 021-35311861-70 or email at

Faryal Ahmed Faheem
Deputy CEO

Applicable rating criterion: Corporates (August 2021)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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