KARACHI: VIS Credit Rating Company Limited has assigned initial entity ratings of single A-Minus/A-Two to Mannan Shahid Forgings Limited.

The medium to long-term rating of 'A-' denotes good credit quality coupled with adequate protection factors.

Moreover, risk factors may vary with possible changes in the economy. The short-term rating of 'A-2' denotes good certainty of timely payments.

The liquidity factors and company fundamentals are considered sound. Outlook on the assigned rating is stable, said a press release on Thursday.

MSFL manufactures a wide range of high-precision forged, heat-treated, and machined components from hot-rolled steel bars with varying grades of carbon and steel alloy. The company generates nearly half of its total sales from exports and the remaining from the local market.

The assigned ratings take into account a moderate business risk profile, underpinned by experienced sponsors and established relations with the customers.

Barriers to entry in the forging industry are high because of capital intensive nature of machinery, high setup costs, longer payback time and the requirement of precise technical expertise.