Press Release

VIS Reaffirms Entity Ratings of At-Tahur Limited

Karachi, April 20, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of ‘A-/A-2’ (A Minus/A-Two) to At-Tahur Limited (ATL). The long-term rating of ‘A-’ signifies good credit quality; protection factors are adequate. 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 ratings is ‘Stable’. Previous rating action was announced on June 01, 2021.

ATL is a vertically integrated dairy operation for production and pasteurization of milk and manufacturing of dairy products under the brand name ‘Prema’. Product portfolio of the company comprises pasteurized milk with shelf life of up to one week, plain and sweet yogurt, fruit yogurt, Laban, flavored milk, butter and cream cheese among 30 assorted SKUs.

Business risk is characterized by significant competition in the packaged milk industry, which comprises only one-tenth of the overall milk consumption in Pakistan. Loose milk constitutes around 91% of the total milk consumption in the country. Untapped loose milk market represents significant growth opportunity for the packaged milk industry players. Business risk profile of ATL is supported by strong brand equity and diversification into other dairy variants among which butter and yoghurt has gained significant growth over the past few years. Moreover, due to short shelf life of key product, the efficient marketing and management of cold supply chain remains a challenging task.

Assessment of financial risk profile factors in sustained growth in revenues and profitability, adequate liquidity indicators and manageable capitalization levels. Revenue growth on a timeline basis is attributable to increase in price, higher volumetric sales underpinned by growing herd size of milk producing animals along with expansion in new geographic areas. Gross Margins after adjusting for gain arising at the time of milking improved to 29% (FY20: 22%) in FY21 owing to higher sales of raw milk and yoghurt with the company managing to earn good margins on sale of raw milk in the demand season. Adjusted profitability (excluding accounting gains) during HY22 was impacted due to decreasing margins owing to higher cost of feed and higher administrative and selling expenses due to feeding time cost of new cattle added in the outgoing year. Going forward, the company plans to further improve its gross margins on the back of economics of scale and increase in sales contribution from high margin products. In line with the higher revenues and increased margins, the company exhibited notable improvement in cash flows coverages during FY21 with weakening noted in HY22. While remaining manageable, the leverage indicators have increased steadily over the past three years and expected to increase further by the end of ongoing year mainly for the capacity enhancement plan. However, continued growth in revenues and stability in profitability and cash flows in line with the projections will remain important from the ratings perspective, going forward.

For further information on this rating announcement, please contact Ms. Asfia Aziz at or the undersigned at 021-35311861-70 (Ext. 207) or email at

Sara Ahmed

VIS Entity Rating Criteria: Industrial 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 .