The Pakistan Credit Rating Agency Limited
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Muhammad Obaid

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PACRA Assigns Initial Entity Ratings to Global Marketing Services

Rating Type Entity
(14-May-19 )
Action Initial
Long Term BB+
Short Term A3
Outlook Stable
Rating Watch -

Global Marketing Service (GMS) derives revenue from sales of medical equipments and other supplies, which serve as a key ingredient in the health diagnostic sector. GMS has two primary segments of operations: Clinical and Cardiac. Cardiac division is being made an independent partnership, in which the current partners holding directly and indirectly is approx. 80%. There is intense competition in the sector, as evident from falling margin and heightened cost of doing business. GMS is striving to hold its position. The firm is led by Mr. Zafar, Owner, as assisted by other partners, some of whom are long standing with the firm. The ratings of GMS reflect its adequate business fundamentals. The firm imports all of their inventory, hence exposed to currency fluctuation and pricing risk. GMS is poised to derive benefits from new product-line introduced under cardiac division, though currently in red zone. This could help GMS to diversify in different segments and reduces the concentration risk. Overall financial profile is characterized by low capital base and formal and non-formal leveraging. Although profitability has been deteriorated, the company has designed a strategy to boost the same.
The ratings are dependent on the company's ability to sustain business volume and margins. In the wake of dwindling profitability, upholding financial discipline is important.

About the Entity
GMS, registered as a partnership concern in 1999, is serving the health industry. The firm have steadily expanded its line of products and created a presence in various diagnostic markets, attaining a respective stature in healthcare and Research/Life Science Solutions. Firm’s focus areas include biomedical investigation, research, life sciences, blood banking, hematology and other medical devices. The firm enjoys exclusive alliances with world leading principals in the In Vitro Diagnostics, Transfusion Medicine, Disposable and other allied segments. GMS has achieved sustained ranking in the top quartile of industry.
GMS comprised of two separate divisions - Clinical and Cardiac. Going forward, sponsors have drawn up separate partnership deeds for Cardiac division under the name of Global Medical Solutions. Mr. Zafar Mehmood holds majority ownership (68%) of Clinical division, remaining ownership is held by Mr. Muhammad Ayub (20%) and Mr. Fahad Ahmed Khan (12%). 80% of the Cardiac division is held by these individuals. Corporate head office of the firm is in Islamabad. Corporate, Marketing, Distribution and Storage facilities are located in Rawalpindi.

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.