The Pakistan Credit Rating Agency Limited
Press Release


Sohail Ahmed Qureshi

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of Global Marketing Services

Rating Type Entity
(19-Sep-23 )
(23-Sep-22 )
Action Maintain Maintain
Long Term BBB BBB
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Global Marketing Services (GMS or “the Company”) has a reputable business profile in the clinical and medical lab equipment segment, which serves as a key ingredient in the health diagnostic field. GMS operates two primary business divisions, Clinical and Medical, comprising a wide range of products related to Biomerieux, core & molecular diagnostics, Onco DX, medical & hospital solutions, and clinical genomics. The clinical division has a significant revenue contribution and deals with lab diagnostic and testing equipment kits. The presence of the company in medical lab equipment augmented the diversification benefits in their revenue streams. In recent times, the pharmaceutical industry has faced multiple challenges including increased costs of borrowing due to elevated interest rates, massive PKR devaluation resulting in hefty foreign exchange losses and a hyper-inflationary environment. Although a prioritized segment, the pharmaceutical sector was affected by import restrictions to some extent due to delays in establishing LCs. Key strategic pillars of GMS are responsibility and responsiveness towards customers’ needs and its association with more than 15 globally renowned principals. Ratings also take comfort in GMS’ strong customer base comprising well-reputed health institutions in the public and private sectors across the country. Going forward, the management intends to corporatize both business divisions separately. The corporatization process of the medical division is underway and a new company has been incorporated under the name of “Global Medical Solutions (Pvt) Ltd” but the completion will be time-sensitive to technicalities in transferring existing business to a new entity and associated DRAP regulations. GMS has developed an internal audit and compliance function that conducts periodic audits to ensure compliance with relevant quality standards. The firm is led by Mr. Zafar, the owner of a majority stake in both business segments, he is assisted by other partners, The firm imports all of its inventory, hence it is prone to currency fluctuation and associated foreign exchange risks. To minimize these effects, the firm has managed to secure long-term contracts with its major customers enabling GMS to sell products at prices based on the prevalent USD exchange rate. Recently, GMS has acquired distribution rights for a range of products of Abbott which will contribute positively towards the growth of GMS’ medical division The overall financial risk profile is characterized by upright working capital management, comfortable cashflows and coverages, adequate capital base, and a non-leveraged capital structure.. The Company is expected to sustain its position as increasing health awareness has shifted the focus of the general public toward self-well-being, and healthcare. Currently, the Company needs to devise its strategy to cope with economic challenges to sustain its financial risk profile.
The ratings are dependent on the firm’s ability to sustain its topline, maintenance of profitability matrix and generation of sufficient cashflows to induce growth. Delivery of the envisaged business and corporatization plan is crucial.

About the Entity
GMS, registered as a partnership concern in 1999, has been serving the health industry for over two decades. The firm has steadily expanded its line of products in various diagnostic segments, attaining a respectable stature in healthcare and Research/Life Science Solutions.
GMS’ ownership structure is segregated into two business divisions. Mr. Zafar Mehmood holds the majority of the firm's share (68%) in the clinical division followed by Muhammad Ayub (20%) & Miss Naheed Dilshad (12%). Meanwhile, 58% of the medical division is held by Mr. Zafar, while Miss Naheed Dilshad holds (32%) & Mr. Muhammad Ayub has (10%) ownership stake.

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.