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PACRA Upgrades Entity Ratings of Inbox Business Technologies Limited

Lahore, November 24, 2022 (PPI-OT):Pakistan’s tech industry contributes ~1% to the national GDP through local and export sales. Export of IT services are estimated to contribute ~$ 1.7bln to the GDP. The largest contributor remains IT consultancy (~33%), followed by software exports (~25%). Lately, the Government and regulatory bodies have taken initiatives such as the establishment of IT Parks and incubators to promote the industry and provide an enabling ecosystem for businesses and start-ups.

The ratings reflect Inbox Business Technologies Ltd.’s (‘Inbox’ or ‘the Company’) association with a strong business Group; Dawood Hercules Group. The product slate comprises Enterprise Management Service (EMS), Digital Security and Intelligence (DSI), and Citizen Services and Customer Experience (CSX) in both, public and private sectors. EMS consists of providing customer support, IT outsourcing, warranty, remote assistance, and maintenance services. DSI includes Web Management Services (WMS), which is technical facility deployed on internet gateways in Pakistan, to detect and block illegal international voice calls and manage internet traffic.

Whereas, CSX involves the provision of IT related services to the public sector. Inbox has a competitive edge in the industry, as it provides IT solution and services. Lately, the Company’s topline experienced significant growth on the back of renewal and addition of local and international contracts. Hence, the Company is generating profits. The Company’s financial risk profile is characterized by improving coverages and working capital cycle. Moreover, Inbox’s capital structure is supplemented by subordinated loan from sponsors. Conversion of this subordinated loan into equity remains imperative for sustaining the ratings.

The ratings are dependent on the Company’s ability to sustain its margins and post healthy coverages while maintaining requisite cushion and working capital discipline. Continued sponsor support remains imperative for ratings. Any further deterioration in cashflows and/or coverages will have a negative impact on ratings.

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

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