The Pakistan Credit Rating Agency Limited
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Muhammad Harris Ghaffar

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PACRA Maintains Entity Ratings of Tariq Glass Industries Limited

Rating Type Entity
(23-Dec-22 )
(24-Dec-21 )
Action Maintain Initial
Long Term A+ A+
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Tariq Glass Industries Limited (the “Company” or “TGL”) ratings reflect well- reputed oligopolistic business profile and strong presence in the glass industry. TGL has built a formidable foothold of being a premier manufacturer of tableware, float glass, container-ware and opal glass in the Country and possesses the largest state-of-the-art manufacturing facilities. The Company intends to induce growth through their export segment as well by capitalization on international standard and upgraded production equipment. The float glass facilities can produce clear and coloured float glass, sandblasted glass tinted and reflective glass through an online CVD coating mechanism, and mirrors with spectrum technology. The company has expanded its footprints for manufacturing the opal glass dinnerware by installing the most modern manufactory which is the only plant in Pakistan. In float glass, the competition is duopoly and as per the TGL management representation they claim to have ~50% market share under the brand name of “Tariq Float Glass”. The Pakistan glass industry is directly linked with economic activity in the construction sector. The glass sector is mainly dominated by float glass followed by tableware & containers. Revival of the rehabilitation process after flooding and CPEC-related activities along with some expansionary fiscal and monetary policy is critical for the industry future growth. In tableware and opal glass, TGL has built a legacy over 4 decades and introduced famous brands like Toyo Nasic, Omroc, Nova, Rockware, Gemware and Spinrex. The tableware market is emerging more competitive however, the Company provides innovative, value-added products, tailored to the requirements for household and commercial sector with a market share of ~70%. In container-ware, TGL supplies to the beverage industry such as Coke, Pepsi along with other industrial consumers. Key pillars of business strategy include (a) quality and reliability of products (b) economies of scale. The top line of the Company has shown a growth of ~54.0% YoY. The robust growth in revenues is mainly attributable to the successful commercialization of the second Float Glass Plant, the benefits of which thrived resulting in economies of scale. Recently, TGL entered into Joint Venture (a green field and export-oriented project) with ICI Pakistan to explore the global export market of glass and link their future revenue streams in USD. The Company is taking cognizance of corporate governance structure with independent oversight and formulated board committees. The Company is led by experienced management team and operations of the Company benefited with sound system of internal controls implemented across organization. Financial profile is demonstrated by healthy coverages, upright working capital management and comfortable cashflows. The capital structure is moderately leveraged mainly comprising long term borrowings on concessionary rates (LTFF) to support capacity expansion and BMR.
The ratings are dependent on sustainable profits and market share while retaining sufficient cash flows and coverages. However, adherence to maintaining its debt metrics at an adequate level is a prerequisite.

About the Entity
Tariq Glass Industries Limited (TGL) is a public listed company incorporated in 1978. Mr. Omer Baig is the MD/CEO of the Company who beneficially owns ~57% shareholding. The board comprises seven BOD which include two executive directors including the MD/CEO, three non-executive directors including the Chairman and one female director while the remaining two are independent directors.

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.