PACRA Assigns Initial Rating to Madiha International (Pvt.) Limited

Madiha International (Pvt) Limited (“MIPL’’ or “the Company”) is primarily engaged in the import of printer papers; sizing, cutting, and trading. MIPL is a family-owned business. The other family business of the Company are Bikiya Industries and IBM Pakistan. The sponsors have vast experience in the trading business of paper and manufacturing tissue papers, since 1993. As per management representation, out of the total paper market of Pakistan, ~ PKR 37% is met through import. During FY22. The group’s average market share in total imports of paper and paper products is ~40% while MIPL’s average market share is ~12%. The Company mainly covers the Southern region of Pakistan, particularly Karachi. Due to the small business size, the sponsors are looking after the management and governance side of the Company themselves. The external auditor is not QCR-rated. The Company’s MIS is considered adequate.
The financial risk profile of the Company is considered good. The Company is managing working capital in a mix through i) Running finances and ii) Own sources. Hence, the leveraging of the Company remained on the lower side providing a cushion to the assigned rating. While in near future the Company doesn’t intend to have any CAPEX requirements. The Company's revenue during 9MFY22 stood at PKR 376mln and grew by ~10% since Jun’21. While the net profitability of the Company increased on account of a better profit margin. The equity came under pressure during FY20 due to import restrictions, however, it is gradually getting stable on the back of improving profitability. Currently, the Company's equity stood at PKR 36mln at the end of Mar’22.
The Rating is dependent on sustaining its market share and prudent management of the working capital. While maintaining sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will impact the ratings.

About the Entity
Madiha International (Pvt.) Limited was established in 2016 as a private limited Company registered with SECP under the Companies Act, 2017. Its main office is located in Karachi. MIPL is part of a family-owned group of companies. The Company is owned by four shareholders having 25% stake each: i) Mr. Usman Saleem Bikiya. ii) Mr. Muhammad Bilal and remaining 50% with other family members. The Company involves in the import of printer papers and distribution in the local market. Mr. Muhammad Bilal is the CEO and provides external assistance to the Company over financial matters. Mr. Usman Bikiya is one of the directors of the Company.