The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Updates Entity Ratings of Warble (Pvt.) Limited

Rating Type Entity
(21-Mar-23 )
(31-Mar-22 )
Action Maintain Maintain
Long Term BBB- BBB-
Short Term A2 A3
Outlook Stable Stable
Rating Watch - -

Warble (Pvt.) Limited’s 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 healthy top line, is reflected in the entity’s ratings. Further, operational synergies have led to increased margins and augmented profitability. 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 and Europe while raw material for fertilizers is procured locally. 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. Additionally, the Company is diversifying its revenue stream in the construction business through group owned company (i.e., Warble Constructions). The revision in short-term rating factors in the improvement in liquidity position and debt coverage indicators of the company during FY22. Further, the ratings continue to derive strength from the long‐standing experience of the sponsors in the pesticides industry, its established track record of operations and strong competitive position of its diversified products in the country.
Pakistan's agriculture sector suffered massive losses as surplus rains and floods have devastated major crops. However, the Company was able to mitigate this risk on account of an efficient procurement strategy. The ratings, however, remain constrained by the fluctuations in raw material prices owing to PKR depreciation and fragmented & competitive nature of the pesticide industry.
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 Mr. Masood Ur Rehman (46.8%) and Mr. Zain Iftikhar (43.8%), rest of the shares are vested between Mr. Atta ur Rehman (7.7%) Ms. Ghazala Asmat Ghazal (1.6%) (w/o Ch. Iftekhar Niaz– group Chairman). 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.