The Pakistan Credit Rating Agency Limited
Press Release


Sohail Ahmed Qureshi

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of Panther Tyres Limited

Rating Type Entity
(01-Jun-22 )
(01-Jun-21 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Panther Tyres Limited (‘PTL’ or ‘the Company’) is primarily engaged in the manufacture and sale of tyres & tubes for vehicles followed by the sale of auto parts & lubricants. The ratings reflect Company’s strong brand equity to serve OEMs and replacement market. In an industry, which is volume driven and price sensitive, PTL sustains its market share underpinned by product diversification in respective niches. Tyre demand is primarily governed by replacement market followed by automobile production. Intense competition between tyre manufacturers necessitates high quality products at affordable prices. Adoption of advanced technology is indispensable to drive the growth of rubber tyre and tube industry in Pakistan. Pertinently, fluctuating prices of raw materials (natural rubber, synthetic rubber, reinforcing materials) hinder the industry’s growth. Key opportunities are generically available to the industry with improvements in economy, government’s support and anticipated rise in auto and allied sectors. The demand for 2 & 3 wheel segments is entirely served by local market players. Consequently, PTL captures formidable market share in motorcycle tyres, tractor tyres, rickshaw/loader tyres. The Company opens new era by manufacturing OTR tyres in Pakistan – a step towards import substitution. Nevertheless, policy rate hike, exchange rate volatility, and imports through grey channels can pose serious business risks (specifically in terms of volume & margins). Topline of the Company continued to witness reasonable growth on a year-on-year basis, however margins deteriorated owing to increased materials prices, exponential rise in sea freights, and disruption of energy supplies. With its legal status converted into a Public Listed Entity, quality of governance structure improved through independent oversight. The new leadership from the sponsor side built a strong management team with a wholesome mandate. Financial support received from issuing stocks has ramped up the Company’s equity base. Thus, making the capital structure moderately leveraged mainly comprised of STBs. Financial risk profile of the Company is characterized by adequate working capital cycle and coverages. Going forward, growth in sales volume is substantial to attain high market share and maximize its profit margins. The management needs to devise an effective pricing strategy to cope with rising competition among leading tyre manufacturers in Pakistan. Further, the Company intends to materialize the envisaged strategies by strong oversight of risk, compliance and code of corporate governance.
The ratings are dependent on the Company's ability to retain its position amidst competitive business environment, management of market risks, increase in international outreach and improvement in profit margins. Prudent financial performance, strong coverages, and effective liquidity profile shall remain vital for the business.

About the Entity
Panther Tyres Limited is a listed entity, incorporated in 1983. The Company is primarily engaged in the production of tyres & tubes of vehicles and trading business of automobile lubricants & motorcycle spare parts. Panther is the pioneer in the motorcycle tyre manufacturing industry of Pakistan.
Mian Iftikhar Ahmed, a renowned businessman, along with his family owns the majority shareholding of the Company. He has served as the chairman of All Pakistan Tyres & Tubes Manufacturers Association. The overall control of the company vests in seven members (Board of Directors). Out of seven, three are executive directors including the chairman, one is a non-executive member of the sponsoring family and remaining three are independent directors. Mian Faisal Iftikhar is the CEO of the Company and is supported by a team of qualified and experienced professionals.

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.