Press Release

VIS Maintains Entity Ratings of At-Tahur Limited

Karachi, Jun 10, 2024: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of At-Tahur Limited (‘ATL or ’the Company’) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A-’ denotes good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ suggests good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital market is good. Risk factors are small. Outlook on the assigned rating has been revised from ‘Negative’ to ‘Stable’. The previous rating action was announced on June 12, 2023.

The company operates dairy farm for the production and pasteurization of milk, manufacturing of dairy products, and managing cold chain and its logistics. The Company introduced its brand ‘Prema’ in the market in 2009, launching premium quality pasteurized milk, and subsequently launched other products such as whole milk, low-fat milk, ranges of yogurt, laban & flavoured milk, butter and cheese, etc. The management introduced new products, including desi ghee in the dairy-products range and ice tea (Peach) & mango nectar in the non-dairy range. The management plans to initiate exports of premium quality products primarily to the European market. Moreover, ATL is vertically integrated in terms of fodder as well as energy requirements. ATL’s dairy operations are currently among the top players in the organized sector.

The ratings take into account the growing trend in sales witnessed on a timeline basis supported by increasing product prices and higher volumetric sales. Margins and profitability declined in 9MFY24 mainly due to lower non-cash adjustments regarding fair value of dairy stock and higher operating expenses. Going forward, revenue from sale of dairy products is projected to increase further on account of volumetric growth based on increasing brand recognition due to organic growth of milk and yogurt with increasing contribution from value-added products, and some contribution from non-dairy products.

Cash flows and debt service coverages improved in the ongoing year. Current ratio, though increased slightly, remained below the minimum benchmark of 1x. The company has been able to maintain sound cash conversion cycle on account of favorable business dynamics. Aging of trade receivables deteriorated on a timeline basis, as the company extended relaxed credit terms to regular clients in the challenging macroeconomic environment. The management expects full recoveries in this context. The company has been using supplier credit effectively to manage its working capital requirements. Resultantly, the company has maintained a low leveraged capital structure. The ratings are dependent on improvement in sales, margins, and liquidity while maintaining low gearing and sound coverages.

For further information on this rating announcement, please contact at 042-35723411-12 or email at

Applicable Rating Criteria: Industrial Corporates

VIS Issue/Issuer Rating Scale

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