Lahore, November 10, 2022 (PPI-OT):Fazal Holdings (Pvt.) Limited (‘Fazal Holdings’ or ‘the Company’) is a holding company for Fazal Group. Herein “Group means members of the family without reference to any law of Pakistan”. Its investment portfolio comprises a combination of strategic investments (long-term investments in subsidiaries and associates) and a trading portfolio (with short to medium-term time horizon). The ratings reflect the diverse nature and profitability of the strategic portfolio and strong support from sponsors. Trading portfolio comprises listed scrips spread across diverse sectors of the economy.
Fazal Holdings drives its revenue mainly from dividend income and capital gains, along with a share of profit from associates. The dividend stream witnessed a dip during FY22 owing to current economic challenges. However, the share of profit from associates posted an improved trajectory supported by their strong financial performance. This led the Company to increase its stake in some of its related companies. The marketability/liquidity element of the portfolio constitutes majorly of trading investments with a market value of PKR 6bln, providing a cushion to generate liquidity.
The Company has designed a conservative investment policy in accordance with the Company’s equity. This helps the Company to absorb the effects of volatility in the stock market to an extent and keep financial risk manageable. Investment decisions are mainly led by Mr. Rehman Naseem with assistance from resources within Fazal Group and certain research/brokerage houses. Herein, the institutionalization of investment policies would be beneficial. Continued sponsor support remains a key rating factor.
Ratings are dependent on the management’s initiative to strengthen investment decision making process and performance monitoring mechanism of underlying portfolio. This would facilitate Fazal Holdings assimilation into an effective holding company. At the same time, adhering to agreed financial matrix and keeping debt coverages at adequate level remains critical.
For more information, contact:
Analyst,
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
Email: hammad.rashid@pacra.com
Website: www.pacra.com