PACRA Assigns Preliminary Ratings to Panther Tyres Limited PPSTS - PKR 2.0bln | TBI

Panther Tyres Limited ("PTL" or the "Company") is set to issue its first privately placed short-term Sukuk (PPSTS) of PKR 2.0bln. The underlying instrument is secured by a ranking charge over the Company’s current assets. A Debt Payment Account (“DPA”) will be maintained under the lien of the Investment Agent. The first payment equivalent to PKR 500mln shall be made in DPA on or before 21 days before maturity, the second payment on or before 15 days, third payment on or before 7 days, and the last fourth payment on or before 1 day before maturity date of the issue. Such that the amount equivalent to full issue is available in DPA, 2 days before the maturity. PTL is engaged in the manufacturing and sale of tyres and tubes, catering to a diverse market including two- and three-wheelers, agricultural vehicles (tractors), light commercial vehicles (LCVs), jeep, trucks, and buses. The Company has further diversified its portfolio by producing heavy-duty Off-The-Road (OTR) tyres and expanding into the marketing and sale of auto parts and lubricants. The assigned ratings reflect PTL’s strong market position, brand equity, and established presence across both OEM, replacement markets, and exports. The Company has maintained its 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 divided into Original Equipment Manufacturers (OEMs) and the Replacement Market (RM), with RM accounting for the majority of demand. The sector remains exposed to volatility in raw material prices and exchange rate movements, while the four-wheeler segment faces persistent competition from imported products, including those entering through grey channels. The beginning of FY25 marked a period of macroeconomic stabilization, supported by easing inflation, declining interest rates, and improved exchange rate stability, which collectively strengthened consumer sentiment and demand recovery. During FY25, the Company recorded a growth of ~10.3%, reaching PKR 32.5bln. However, margins experienced mild compression due to elevated raw material and energy costs that could not be fully passed on to consumers. However, the revenues continued the growth trajectory, and recorded at PKR 8.9bln and margins also showed improvement at all levels during 3MFY26. The financial risk profile remains moderate, with adequate coverage ratios, steady cash flows, and an extended working capital cycle. The capital structure is leveraged, comprising long-term and short-term borrowings primarily used for capital expenditures and working capital requirements. Going forward, the Company aims to expand its presence in the agricultural and truck/bus tyre segments while pursuing export growth through diversification into new international markets.
The ratings are dependent on the Company's ability to retain its position amidst a competitive business environment, improvement in the profitability matrix, and increase in international outreach. Prudent financial performance like healthy coverages and effective liquidity profile shall remain vital for the business.

About the Entity
Panther Tyres Limited is a public listed company primarily engaged in the production of tyres and tubes for vehicles and the trading of lubricants and spare parts. The Company is majority owned by Mian Iftikhar Ahmed (Chairman) and his family. Mr. Mian Faisal Iftikhar serves as Chief Executive Officer and is supported by an experienced management team.

About the Instrument
The PPSTS will carry 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.