PACRA Assigns Initial Ratings to Panther Tyres Limited PPSTS - PKR 2.0bln | Jan-26

Panther Tyres Limited (“PTL” or the “Company”) has issued its first Privately Placed Short-Term Sukuk (PPSTS) amounting to PKR 2.0bln on 2nd January, 2026, which is secured through a ranking charge over the Company’s current assets. A Debt Payment Account (DPA) shall be maintained under the lien of the Investment Agent, wherein an amount equivalent to PKR 500 million shall be deposited 21 days before maturity, followed by subsequent deposits 15 days, 7 days, and 1 day prior to maturity, such that an amount equivalent to the full issue size remains available in the DPA at least two days before the maturity date. PTL is engaged in the manufacturing and sale of tyres and tubes, catering to a diversified market comprising two- and three-wheelers, agricultural vehicles (tractors), light commercial vehicles (LCVs), jeeps, trucks, and buses. The Company has further diversified its product portfolio through the production of heavy-duty Off-The-Road (OTR) tyres, while also expanding into the marketing and sale of auto parts and lubricants. The assigned ratings reflect PTL’s strong market position, established brand equity, and longstanding presence across OEM, replacement markets, and exports. The Company has successfully maintained its market share in a highly price-sensitive and volume-driven industry, supported by consistent product quality and an extensive distribution network. The domestic tyre industry is broadly divided between Original Equipment Manufacturers (OEMs) and the Replacement Market (RM), with the RM accounting for the majority of demand. The sector remains exposed to raw material price volatility and exchange rate fluctuations, while the four-wheeler segment continues to face competitive pressures from imported tyres, including those entering through grey channels. During 1HFY26, the macroeconomic environment exhibited signs of stabilization, supported by easing inflation, declining interest rates, and improved exchange rate stability, which collectively strengthened consumer sentiment and supported demand recovery. During 1QFY26, net sales increased by 11% amounting to PKR 8,918mln, with growth recorded across all business segments. Gross profit improved to PKR 1,341mln, compared to PKR 924mln in the corresponding period last year, resulting in a gross margin of 15%. The Company’s financial risk profile remains moderate, supported by adequate coverage ratios, steady cash flows, and an extended working capital cycle, while the capital structure remains leveraged, comprising both long-term and short-term borrowings primarily utilized for capital expenditures and working capital requirements. Going forward, PTL intends to expand its presence in the agricultural and truck/bus tyre segments, pursue export growth through diversification into new international markets, and continue its strategic focus on enhancing operational efficiencies, strengthening brand equity, and maintaining a disciplined financial structure.
The assigned ratings remain dependent on the Company’s ability to retain its competitive position, improve profitability metrics, and expand international outreach, while the maintenance of healthy coverage indicators and an effective liquidity profile will remain critical for sustaining the business profile.

About the Entity
Panther Tyres Limited is a public listed company, with majority shareholding held by Mian Iftikhar Ahmed (Chairman) and his family. Mr. Mian Faisal Iftikhar serves as the Chief Executive Officer, supported by an experienced and seasoned management team.

About the Instrument
The PPSTS carries a profit rate of 6MK+0.50% and will have a tenor of six (6) months, and will be redeemed in bullet at the expiry of Tenor. The profit will be paid at maturity. The purpose of this instrument is to finance the Company's working capital requirements.