Press Release
VIS Upgrades Entity Ratings of Ittehad Chemicals Limited
Karachi, May 5, 2026: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Ittehad Chemicals Limited (‘ICL’ or ‘the Company’) from ‘A-/A2’ (Single A Minus/A Two) to ‘A/A1’ (Single A/A One). 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 ‘A1’ indicates strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned rating has been revised from ‘Positive’ to ‘Stable’. Previous rating action was announced on April 29, 2025.
ICL is a public listed, chemical manufacturing company. It produces chlor-alkali and downstream chemical products, including caustic soda, chlorine, hydrochloric acid, sodium hypochlorite, and surfactants, primarily catering to domestic demand, with a growing export presence. The ratings incorporate the Company’s established domestic presence, experienced management, and sound governance framework.
The upgrade in the entity ratings reflects the Company’s strategic initiatives to diversify its product portfolio and transition towards greener chemical capabilities through investment in a biomass power plant. The ratings also incorporate the Company’s ability to maintain a largely stable financial risk profile amid external pressures, alongside its relatively strengthened competitive positioning vis-à-vis peers. The ratings also incorporate the Company’s established domestic presence, experienced management, and sound governance framework. While the domestic market continues to contribute the majority of revenues, exports have shown modest growth. Profit margins remain under pressure; however, cash flows and debt coverage indicators have improved. The Company has historically maintained a conservative capital structure, though the increase in debt going forward, primarily linked to biomass project financing and expansion, is expected to put pressure on capitalization indicators. However, the Company remains confident in achieving projected financial results, supported by expected cost efficiencies and improved margins post commissioning. Additionally, capacity expansion through the flaker plant is likely to improve value addition and strengthen the product mix. Ratings remain sensitive to the Company’s ability to achieve projected performance and maintain capitalization and liquidity ratios within acceptable thresholds.
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