The Pakistan Credit Rating Agency Limited
Press Release


Sohail Ahmed Qureshi

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PACRA Assigns Positive Outlook to E-Vision Manufacturing Limited

Rating Type Entity
(24-Jun-22 )
(24-Jun-21 )
Action Maintain Maintain
Long Term BBB BBB
Short Term A2 A2
Outlook Positive Stable
Rating Watch - -

The ratings reflect the adequate business profile of E-Vision Manufacturing Limited (“the Company” or “E-Vision”) and its established position in the regenerated polyester staple fiber (r-PSF) industry. The Company has identified a niche in the textile industry by manufacturing fine white, black, and green regenerated polyester staple fiber and polyester chips using post-consumed polyethylene terephthalate (PET) bottles. This market is relatively new and in the growing phase. Management represented those various global environmental authorities are promoting to use of r-PSF as against virgin PSF because the manufacturing process of r-PSF consumes less energy, and does not deplete natural energy resources and r-PSF is ~75% cheaper than virgin polyester fiber. During CY21 revenues showed recovery as compared to the dip in CY20, which exhibited a CAGR of ~16% since CY19. Margins also depicted improvements at all levels due to efficient raw material sourcing and more reliance on imported raw materials, this captures a positive outlook. The financial risk profile of the Company is considered adequate with comfortable coverages, cashflows, and working capital cycle. Capital structure is leveraged where borrowings are comprised of short-term for working capital management. Going forward the sponsors of the Company have approved a future capacity expansion plan from 60tpd (current) to 100tpd. The cost of expansion will be covered from internally generated cashflows and equity contributions with a conservative leverage policy.
The ratings are dependent on upheld sustainable revenues and margins. Meanwhile, maintaining an adequate leveraged capital structure and strong coverages remain critical. Going forward, a better governance framework, improvement in the control environment, and strengthening the quality of external audit function by engaging auditors which are included in SBP’s panel of auditors.

About the Entity
E-Vision Manufacturing Limited is a public, unlisted entity incorporated in 2013. The Company is engaged in the manufacturing and regeneration of polyester staple fiber with a gross production capacity of 60 tons per day. The Company’s major shareholding (~60%) is held through an offshore investment Company, Marylebone Management Limited, incorporated in the British Virgin Islands and owned wholly by Mr. Salman Ganny. The remaining shareholding (~40%) rests with Mr. Abdul Ghaffar (CEO).

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.