Lahore, December 12, 2018 (PPI-OT): Pakistan’s personal and homecare product market has shown an annual growth rate of 2-3%. The industry not only fulfils the entire local demand but also has the potential to export its products. Within the homecare products, a rapid switch has been witnessed from soap/liquid to powder detergents. The market for soap bars posted an annual dip of 8-10%. However, the market for powder detergents posted an annual growth of 15-20%.
The ratings reflects Azhar Corporation (Pvt.) Limited’s diversified revenue stream and strong presence in Soap and Vegetable Ghee/Edible Oil market. The Company is a market leader with an established brand – Gai Soap and thus generates most of its revenue from local sales, while some exports are made to Afghanistan.
The Company is trying to maintain its market share by expanding geographically and have introduced new product (Powder detergent – Gai Power Wash) in the market. Being a new entrant in the branded Vegetable Ghee/Edible Oil market – Gai Banaspati, the Company’s Oil/ Ghee business is in a challenging phase; thus impacting the overall performance. Financial profile of the Company remains stable owing to moderately leveraged capital structure; consisting of short-term debt only, obtained to finance the working capital requirement. The Company’s coverage ratios remain modest.
The ratings are dependent on the management’s ability to prudently manage its market share, while maintaining business margins. Pressure on business volume and margins owing to the market conditions may negatively impact 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