Press Release

VIS Assigns Initial Ratings to Mannan Shahid Forgings Limited

Karachi, March 17, 2022: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Mannan Shahid Forgings Limited (MSFL). The medium to 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 payment coupled with sound company fundamentals and liquidity factors. Outlook on the assigned ratings is ‘Stable’.

The ratings assigned to MSFL take into account a moderate business risk profile supported by experienced sponsors who are actively involved in managing company’s operations. The company is engaged in manufacturing high precision mechanical components for auto parts manufacturers and machining houses in Pakistan and abroad. The ratings also factor in presence of limited number of organized players operating in the country with relevant capacities and technical expertise, giving rise to high customer retention and largely steady demand for relevant products in the local market. The concentration risk in sales has remained high which has been partially offset by high retention levels and induction of some new clients and products in the recent years. Topline exhibits an upward trajectory emanating from higher volumetric sales and uptrend in average selling prices. Nearly half of the sales constituted exports in the outgoing year while its contribution increased further to two-third of revenue during 1HFY22. Profit margins have improved notably amidst higher selling prices and economies of scale along with rationalization of operating costs. The financial risk profile is underpinned by sound cash flow coverages and comfortable leverage indicators. Going forward, growth in revenue is projected to be largely driven by higher export orders. Achieving projected revenue growth and profitability while maintaining liquidity and capitalization profiles would remain key rating considerations. Meanwhile, the ratings also factor in vulnerability of raw material prices to exchange rate fluctuation and any adverse changes in regulatory duties.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at

Faryal Ahmad Faheem
Deputy CEO

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 .