Press Release

VIS Assigns Initial Ratings to Blow Plast (Pvt.) Limited

Karachi, March 24, 2022: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB/A-2’ (Triple BBB /A-Two) to Blow Plast (Pvt.) Limited (BPL). The medium to long-term rating of ‘BBB’ denotes adequate credit quality coupled with reasonable 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 payment coupled with sound company fundamentals and liquidity factors. Outlook on the assigned ratings is ‘Stable’.

BPL, a family owned enterprise, is engaged in the manufacturing of Polycarbonate Bottles (Bulk Water bottles), PET Jars and Toys for variety of customers operating in the bottling, pharmaceutical and FMCG sector. The production facility of the Company is located at SITE Karachi.

The assigned ratings take into account the moderate business risk profile of the Company. BPL primarily caters to the bottling and consumer packaged goods industries, which have exhibited relatively stable product demand during various economic cycles. The demand outlook in these industries continues to remain sound going forward given the population growth and demographics of the country. Company faces volatility in raw material prices and exchange rates on account of reliance on imports. Client wise concentration is considered moderate. Overall governance and control framework depicts room for improvement.

Assessment of financial risk profile indicates limited profitability, adequate liquidity profile and capitalization indicators. Net Sales of BPL have grown at a healthy CAGR of 10.4% in the period from end-FY18 to end-FY21. However, gross margins have witnessed reduction on a timeline basis due to increase in prices of raw materials and rupee devaluation. Net margins have remained very thin on a timeline basis, however, management remains committed to increasing sales in specifically toy segment going forward along with higher consumer demand on account of growing urbanization is expected to bode well for the Company. Liquidity profile of the Company is likely to stay under pressure owing to inflationary environment and higher raw material prices. However, a positive cash conversion cycle is likely to provide comfort to a certain extent. Debt profile encompasses interest free loans from sponsors and related parties. Resultantly, capitalization indicators stand at comfortable levels. Going forward, improvement in profitability and maintaining adequate leverage indicators and a positive cash conversion cycle is considered important from ratings perspective, along with sustained availability of Director’s loan to support company’s operations.

For further information on this rating announcement, please contact the undersigned (Ext: 204) or Sara Ahmed (Ext: 207) at 021-311861-71.

Sara Ahmed

VIS Entity Rating Criteria: 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 .

VIS Credit Rating Company Limited