Press Release

VIS Assigns Initial Entity Ratings to Devsinc (Private) Limited

Karachi, October 31, 2024: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB+/A2’ (Triple B Plus/A Two) to Devsinc (Private) Limited (‘Devsinc’ or ‘the Company’). Medium to long-term rating of ‘BBB+’ signifies adequate credit quality; Protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. Short term rating of ‘A2’ indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings is ‘Stable’.

Devsinc (Private) Limited, established on April 14, 2021, in Lahore, Pakistan, specializes in exporting software development services across various sectors. The Company offers expertise in web development, mobile app development, Generative AI, cybersecurity, and cloud migration and management. Headquartered in Lahore with a regional office in Islamabad, Devsinc serves a diverse international clientele, primarily from the United States in sectors like healthcare, financial services, and e-commerce. The Company is led by its founder and CEO, Mr. Usman Asif.

Assigned ratings incorporate business risk profile of the IT sector supported by strong global demand for software development services, particularly in the U.S. The software services sector, bolstered by government initiatives like the Pakistan Software Export Board (PSEB), has grown significantly, with a compound annual growth rate (CAGR) of 21% from FY20 to FY24. In line with growth across the subsector, topline has increased significantly over the past four years, outpacing the overall growth of the software services sector. Ratings incorporate strong profit margins which supports the financial risk profile of the Company. The Company continues to benefit from currency exchange gains from export revenues.

Despite its strong business potential, Devsinc faces challenges in scaling due to difficulties in talent acquisition and retention, a common issue in the competitive IT landscape, which the Company has mitigated over the years as evidenced by growth in headcount. The Company's liquidity remains sound with a healthy current ratio and efficient cash conversion cycle. Furthermore, Devsinc maintains a low financial risk profile, with zero debt and reliance on sponsor support through interest-free loans. While its corporate governance framework could be enhanced, with room for a more diversified board and independent directors, raising governance risks that could impact long-term sustainability. Improvements in these areas remain crucial.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.



Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .