Press Release
VIS Reaffirms Entity Ratings of Power Cement Limited
Karachi, January 16, 2026: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of Power Cement Limited (‘Power’ or ‘the Company’) at ‘A-/A2’ (Single A minus/A Two). Medium to long term rating of 'A-' indicates good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short-term rating of 'A2' suggests good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings remains ‘Stable’. Previous ratings action was announced on December 23, 2024.
Power was incorporated in 1981 as a private limited company and was later converted into a public limited company in 1987. Power is listed on Pakistan Stock Exchange Limited (PSX). The Company is engaged in manufacturing, selling and marketing of Cement though it also produces other varieties of cement.
The assigned ratings reflect the Company’s association with the Arif Habib Group, which provides strong sponsor support in the form of financial flexibility, strategic oversight, and demonstrated commitment during periods of elevated leverage and industry stress. The Company operates in a cyclical and energy-intensive cement sector that is exposed to fluctuations in construction activity, fuel prices, and exchange rates; however, these risks are partially mitigated by its established operating base, diversified sales channels, and growing export presence. During the period under review, profitability improved despite a contraction in revenues, supported by effective cost rationalization, lower fuel and power expenses, and a reduction in finance costs following debt repayment. Operational efficiency remains a key strength, underpinned by improved energy cost due to increasing reliance on renewable energy sources, with further diversification expected through wind power initiatives. Capital structure indicators have strengthened due to lower debt levels and higher equity, resulting in improved leverage and enhanced debt-servicing capacity. Liquidity has also shown improvement, supported by positive cash flows from operations and stronger coverage of short-term obligations. Governance and management practices are broadly in line with regulatory requirements, with ongoing efforts to further strengthen board independence. Going forward, the assigned ratings remain sensitive to the sector’s recovery, a revival in the construction industry, and prevailing government policies. The Company’s ability to strengthen its capitalization metrics through internal means, enhance liquidity, and normalize coverage indicators will be key considerations.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Corporate Rating
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf