PACRA Maintains Entity Ratings of Inbox Business Technologies Limited

Ratings of ‘A-/A-2’ (A Minus/A Two) for Inbox Business Technologies Limited (IBTL), reflects strong credit quality supported by reasonable protection metrics. These ratings highlight IBTL’s resilience to economic changes, though some risk factors could vary in alignment with macroeconomic shifts. The short-term ‘A-2’ rating indicates a solid capacity for timely obligations servicing, with a ‘Stable’ outlook on assigned ratings.
IBTL specializes in a range of IT services, including enterprise applications, IT infrastructure, managed services, and digital transformation deriving income from the main five heads as Enterprise Managed Services (EMS), Citizen Services & Customer Experience (CSX), Cloud & Converged Systems Integration (CSI) , Digital Services & Intelligence (DSI) And International Business. As a wholly-owned subsidiary of Dawood Investment (Pvt.) Limited, an investment holding entity under the Dawood Group, IBTL benefits from sponsor support, which remains crucial for maintaining its ratings. The company has expanded into Saudi Arabia through its subsidiary, Inbox Technologies Arabia, enhancing its regional presence. The ratings also reflect IBTL's satisfactory corporate governance, measured business risk profile, and adequate financial metrics. Its business risk profile is strengthened by a portfolio of medium- to long-term contracts, a strong contract renewal rate across core segments, an established market position, and high barriers to entry. These contracts support revenue visibility in the medium to long term, while IBTL’s specialized workforce and wide geographic reach further fortify its competitive position. However, a significant concentration risk arises from its reliance on the Citizen Services & Customer Experience (CSX) segment, contributing over 80% of revenue. Changes in government policy or budget allocations could materially impact this revenue stream.
Financially, IBTL has a moderately leveraged capital structure with working capital needs primarily met through short-term borrowings. The working capital cycle, though stretched, remains operationally viable, with credit metrics within acceptable ranges. A consistent yearly reduction in losses adds comfort, and recent profitability improvements result from cost-optimization initiatives. Ongoing cost-control measures and revenue realization from current contracts should further support profitability. However, given the rapid pace of technological advancement, IBTL faces a need for regular software and hardware upgrades, alongside skill development costs.
The ratings are contingent upon the timely realization of projected revenues and cash flows, as well as an improvement in leverage metrics and debt servicing capacity in the coming periods. Continuous sponsors support remains indispensable for ratings. Any decay in the cashflows and coverages will be having a negative impact of the company’s ratings.

About the Entity
Inbox Business Technologies Limited (IBTL) is a public unlisted company, established in 2001 by Mr. Ghias Khan (former CEO of Engro Corporation Limited) alongside Mr. Mir Nasir and Mr. M. Ali. The Dawood family later acquired the company, with its majority shareholding now held by Dawood Investments (Pvt.) Ltd., formerly known as Patek Pvt. Ltd., the family’s investment holding entity. The Board is chaired by Mr. Shamoon Chaudhry, while Mr. Mohsin Ali serves as CEO, backed by a team of seasoned professionals.