PACRA Maintains Entity Ratings of Berger Paints Pakistan Limited

Lahore, November 07, 2019 (PPI-OT): The ratings reflect Berger’s established position and brand recognition in the premium domestic paint market of the country. The ratings incorporate strong governance framework and experienced management team along with effective control framework. The revenue of the company has declined due to relative slowdown in overall construction and related activities. However, the revenue stream is well diversified with retail, industrial and government clients.

The Company imports most of its raw materials, the cost of which have increased due to rupee devaluation. The gross margin has come under pressure lately as the Company was not able to fully pass the costs to its customers due to high competition. However, operating margin was improved through effective cost control, which enabled the company to maintain its net profitability. The financial profile of the Company is characterized by strong coverages and working capital management, while the capital structure remains moderately leveraged.

The ratings are dependent upon the management’s ability to improve margins and profitability. Prudent management of the working capital, maintaining good coverages and strong capital structure is also important for the ratings. Significant decline in top line and/or deterioration in margins leading to erosion of profitability will have negative impact on the ratings.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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