Press Release

VIS Reaffirms Entity Ratings of Sitara Chemical Industries Limited

Karachi, June 16, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Sitara Chemical Industries Limited (‘SCIL’ or ‘the Company’) at ‘A+/A2’ (Single A Plus/A Two). The 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. The short-term rating of ‘A2’ denotes good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on June 02, 2025.

The ratings reaffirmation is anchored by the Company's well-established position in the chemicals industry, alongside its experienced management team and sound corporate governance. The assigned ratings also reflect strategic initiatives, including the initiation of a 50MW coal-fired power plant and ongoing plans to diversify the product mix. While revenue grew steadily in FY25 and held firm through 9MFY26 mainly on the back of higher average prices, capitalization ratios and liquidity ratios weakened due to the increase in borrowings for procuring raw material and machinery for the power plant. Nonetheless, debt coverage metrics improved, buoyed by stronger operational cash flows. To address the pressure on liquidity position, the Company is in advanced stages with commercial banks for reprofiling its debt mix, by converting short-term loans into long-term facilities. Moving forward, the assigned ratings will remain highly sensitive to improvements in both liquidity and capitalization metrics, along with maintenance of its healthy revenue generation and cash flow coverages.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk

Applicable Rating Criteria:

Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright June 16, 2026 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.