PACRA Maintains Debt Instrument Rating of Berger Paints Pakistan Limited – PP Sukuk – Sep -21

Lahore, May 27, 2023 (PPI-OT): The ratings reflect Berger Paints Pakistan Limited's (“Berger” or the “Company) established position and strong brand in the premium domestic paint market of the country. The Company has strong governance framework and an experienced management team leading to effective controls.

The ratings also find comfort in Berger's well diversified revenue stream with retail, non-retail and allied business segments. The paint industry remained competitive and pressurized due to presence of large unorganized sector and ongoing global inflation, supply chain disruption, hike in policy rates coupled with rupee deprecation. The Company’s non-retail business, dominated by automotive paints, also faces pressure due to recent decline in passengers car sale.

During 9MFY23, financial performance of the Company was slightly distressed, however revenues depicted marginal growth to stand at PKR 5.3bln (9MFY22: PKR 5.2bln). The profit after tax of the Company stood at PKR 144mln during 9MFY23 (9MFY22: PKR 156mln). The equity of the Company as of Mar'23 was PKR 2,405mln (FY22: PKR 2,346mln). The financial risk profile of the Company is characterized by moderate coverages and stretched working capital cycle which is an industry wide norm. Berger had issued the privately placed sukuk to facilitate working capital management of the Company.

The ratings are dependent upon the management’s ability to sustain upheld profits and margins while improving its financial performance. Generating operating cashflows along with maintaining efficient supply chain and prudent working capital management is important.

For more information, contact:


The Pakistan Credit Rating Agency Limited (PACRA)

Awami Complex, FB1, Usman Block New Garden Town,

Lahore, Pakistan

Tel: +92-42-5869504-6

Fax: +92-42-5830425