Pakistan Credit Rating Agency Limited maintains entity ratings of TPL Trakker Limited

Lahore, June 29, 2015 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of TPL Trakker Limited (TPL) at “A-” (Single A minus) and “A2″ (A two) respectively. These ratings denote a low expectation of credit risk with strong capacity for timely payment of financial commitments.

The ratings reflect TPL’s market leadership position in tracking industry, emanating from its diverse product portfolio, superior technology infrastructure, and association with Digicore – an established player. The management’s efforts of bringing innovation to product basket and recently launched “Navigation” have paved the way for expansion.

Due to the upfront infrastructure cost related to new segments, the gross margins declined; with rise in volume, this is expected to witness an uptick. The management is very active in expanding customer base. Meanwhile, extended working capital requirement to serve the bulk business kept financial flexibility under check – though funding of a portion through a long-term loan, from OPIC, is good for debt structure.

In the ongoing period, sizeable proceeds against sale of an investment have provided resilience to cash position. Sustainability, from incremental cash flows from core operations, going forward, remains important for coverages which are currently under pressure.

The ratings are dependent on the company’s ability to sustain its market share and technological edge in the industry. Adherence to good financial discipline while strengthening debt servicing capacity through improving cash flows is important.

For more information, contact:
Hammad Rashid
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

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