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PACRA Assigns Initial Entity Ratings to BBJ Pipe Industries Limited

May 9, 2019

Lahore, May 09, 2019 (PPI-OT): BBJ Pipes Industries Limited, a family operated business, is engaged in steel and polyethylene pipes industry. The company has been catering to the demand of government/corporate projects since last many years. The ratings reflect an adequate market presence of the company in a highly fragmented industry. Over the last few years, the company’s business risk profile has strengthened on account of better volumetric sales. Furthermore, the company is expanding its production capacity which may bode well in coming years. Steel pipe industry has some vital players operating in the market yet BBJ has earned a good name in its respective niche.

The Company operates on adequate but improving business margins. The financial risk revolves around higher short-term borrowings to support the working capital – inherent need of the business model followed by the company. The ratings also take into account strong equity base (1QFY19: PKR 2.44bln; FY18: PKR 2.42bln) – providing intrinsic risk absorption capacity. Going forward, the Company’s debt levels are expected to remain range-bound as no long-term financing is planned in foreseeable future.

The ratings are dependent upon the company’s ability to sustain and improve its business profile in the wake of challenges in current diluted economic scenario. Herein, effective and prudent management of financial risk indicators remain important.

For more information, contact:
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

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