The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains Entity Ratings of Warble (Pvt.) Limited

Rating Type Entity
(26-Aug-21 )
(26-Aug-20 )
Action Maintain Upgrade
Long Term BBB- BBB-
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

Warble (Pvt.) Limited (herein referred to as 'Warble' or 'the Company') operates in three segments, namely: i) Pesticides ii) Seeds and iii) Fertilizer. The Company over time expanded its operations by entering into different businesses in the agriculture industry while achieving operational efficiency. The Company is part of one of the pioneer groups of the industry. After incorporation in 1995, the Company has been able to cement its position as a major market player in the sector. Warble has reported adequate turnover, with good contribution of each segment, while pesticide remains the predominant segment in terms of revenue. Profitability of the Company, though, has room for improvement. The Company's plant is located at Khanewal; near home market (Multan), which benefits its cost structure. Warble has secured its sales by the franchise network named 'AGROMART', complimented by frequent interaction with the end consumers. It meets its working capital requirements through a mix of internal cashflows and short-term borrowings. However, the financial risk remains under control, on account of low long-term borrowings and adequate coverages. Supply mechanism of raw material, predominantly from China, was under pressure, in the wake of the global COVID-19 pandemic. Subsequent to the ease in lockdown restrictions, such constraints have subsided. The ratings take comfort from the sponsor strength, with AllahDin Group having interests in various segments of the agriculture industry, for more than two decades. Having a diversified product mix bodes well for the Company and the group, in the wake of an ever-changing industry. The ratings also take into account the superior quality of the production process and notable production capacity of the Company. Going forward, the improvement in bottom-line and cash flows, standardization in governance structure and financial transparency is vital.
The ratings are dependent on the improvement in business and financial profile of the Company. Any deterioration to topline, margins or cash flows remain critical to the ratings. The Company's sustained business performance in the currently stretched economic scenario, amid COVID-19 remains vital to the ratings.

About the Entity
Warble, a private limited Company, was incorporated in the year 1995. It is one of the pioneer companies of the AllahDin Group. There has been a recent shift in the ownership structure of the Company. Shareholding of the founding generation comprising Ch. Ifitikhar Nazir, the Group Chairman, and his brother Mr. Atta Ur Rehman, the past CEO of Warble, has been transferred to their respective sons. The Company is now majority owned by the two cousins, Mr. Masood Ur Rehman (51.0%) and Mr. Zain Iftikhar (47.4%), while the rest of the ownership is held by Ch. Iftikhar's wife, Mrs. Ghazala Asmat. The Board of Directors comprises three members. Namely, Mr. Masood Ur Rehman (CEO), Mr. Zain Iftikhar and Mrs. Ghazala Asmat.

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.