The Pakistan Credit Rating Agency Limited
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Maryam Arshad

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PACRA Maintains Entity Ratings of Warble (Pvt.) Limited

Rating Type Entity
(31-Mar-22 )
(26-Aug-21 )
Action Maintain Maintain
Long Term BBB- BBB-
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

Warble (Pvt.) Limited’s (herein referred to as ‘Warble’ or ‘the Company’) rating is underpinned by the consistent support it receives, owing to the synergistic benefits from the Group. The Company’s prudent decision making framework, in tandem with its adequate topline growth, is reflected in the entity’s ratings. The growth in revenue can be attributed to the inflationary pressure, coupled with higher volumetric sales. Further, operational synergies have led to increased margins and augmented profitability. Additionally, the adverse impacts of the Pandemic’19 on the financial performance of the Company are gradually diminishing, as can be witnessed by the contraction in the net working capital requirement of the Company, in conjunction with an increase in the net profit margin. Warble primarily engages in the production and sale of three different segments of agri-based products, namely i) Pesticides ii) Fertilizers iii) Seeds. While the raw materials for pesticides are essentially procured predominantly from China, India and Europe, raw materials for fertilizers are procured from LayallPur Chemicals at dealer rate. The Company maintains a well-integrated network of over 750 franchises spread across the country. Moreover, in lieu of relying heavily on imported products, the Company expanded its product portfolio by incorporating locally produced biofertilizers that are a cost effective and efficient substitute for urea-and-DAP-based fertilizers. The ratings further factor in stable coverages and adequate liquidity levels maintained by the Company.
The ratings assigned to Warble take into account a moderate business risk profile; the sponsor strength emanates from Allahdin Group’s vast and prolonged business interests in fertilizers, pesticides and other commodities. Going forward, ratings remain sensitive to the achievement of projected revenues, maintenance of debt servicing ability and enhancement in coverages.

About the Entity
Warble, incorporated in 1995, is a Private Limited Company, offering a variety of agri-based productions ranging from urea and DAP based fertilizers, to pesticides and seed varieties. The Company’s plant is located at Khanewal, benefitting the overall cost structure owing to the proximity with the dealer network. Additionally, Warble also cherishes amplified sales owing to its expansive operational network, as the Company has over 750 franchises spread across the country. The Company is majority owned by two cousins: Mr. Masood Ur Rehman and Mr. Zain Iftikhar with 51.0% and 47.4% holding respectively. The rest of the ownership vests with Mrs. Ghazala Asmat, the wife of Chaudhary Iftikhar Nazir the pioneer of the Allahdin Group). The Board comprises three members, namely Mr. Masood Ur Rehman CEO), Mr. Zain Iftikhar (Executive Director) and Mrs. Ghazala Asmat (Non-Executive Director).

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.