VIS Reaffirms Entity Ratings of Shirazi Investments (Private) Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- February 03, 2023 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

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VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Shirazi Investments (Private) Limited (SIL) at 'AA/A-1' (Double A/A-One). The medium to long-term rating of 'AA' signifies high credit quality; protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short-term rating of 'A-1' denotes high certainty of timely payment, liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is 'Stable'. Previous rating was announced on January 11, 2022.

Shirazi Investments (Private) Limited (SIL) is the holding company for the 'Atlas Group of Companies', which is one of the top ten business groups in Pakistan and has a long established history of nearly six decades with a cumulative annual turnover of approximately Rs. 347b reported in FY22. SIL's business risk profile is supported by a diversified portfolio of investments in various sectors including manufacturing, power generation, trading and financial services. Shareholding of SIL is vested among members of the Shirazi Family.

The Company's long-term strategic investment portfolio represented around 70% of total asset base at end-June'22 majorly comprising exposure in group companies. Around four-fifth of the portfolio is represented by 2 subsidiaries (Atlas Power Limited and Atlas Honda Limited) and 1 associate company (Honda Atlas Cars). The cyclical nature of the automotive sector retains considerable weight on the ratings assessment as nearly one-half of the dividend income is generated from this sector.

In relation to the same, rating captures significant demand slowdown in the automobile industry in view of the weak economic fundamentals of the country, high benchmark rates, political uncertainty...