The Pakistan Credit Rating Agency Limited
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Muhammad Azmat Shaheen

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PACRA Maintains Rating of Madiha International (Pvt.) Limited

Rating Type Entity
(03-Apr-23 )
(14-Sep-22 )
Action Maintain Initial
Long Term BB BB
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

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 FY22 stood at PKR 736mln and grew by 115.2% since Jun’21. The net profitability of the Company decreased on account of elevated finance costs during the period. 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 25.3mln at the end of Jun’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.

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.