Press Release
VIS Reaffirms Entity Ratings of Thatta Cement Company Limited
Karachi, September 18, 2025: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of Thatta Cement Company Limited (“THCCL” or “the Company”) at 'A/A2' (Single A/A Two) with a “Stable” outlook. 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' indicates a good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Previous rating action was announced on September 12, 2024.
THCCL was incorporated in Pakistan in 1980 as a public limited company under the repealed Companies Act, 1913 (now the Companies Act, 2017) and was listed on the Pakistan Stock Exchange in 2008. The Company’s principal business activity is the manufacturing and marketing of clinker and cement. The registered office is located in Karachi, while the production facility is situated at Ghulamullah Road, Makli, District Thatta, Sindh.
Assigned ratings take into account the business risk profile of the cement sector, which reflects structural overcapacity, cyclical demand patterns, and exposure to cost volatility. The industry remains concentrated among a few large producers but competitive pressures persist given subdued domestic activity and reliance on construction-linked demand. Profitability is constrained by energy and taxation factors, while financial risk is elevated due to debt-funded expansions and working capital needs. Recovery prospects hinge on policy support and improved demand.
The assigned ratings of the Company also reflect sustained improvement in financial performance, supported by stronger profitability, enhanced liquidity, and a conservative capital structure. Profitability was reinforced by the shift to cost-efficient domestic coal and the commissioning of a 5MW solar project and a 4.8MW wind power plant, which diversified the energy mix and provided an effective hedge against input cost volatility. Capitalization remains conservative, with no long-term debt and minimal reliance on short-term borrowings, translating into low gearing and strong debt-servicing capacity underpinned by healthy cash flows.
Looking ahead, the Company’s planned diversification into a new business line may constrain liquidity due to funding requirements in the near term. Nonetheless, the initiative is expected to support the Company’s cash flow generation going forward. Ratings remain underpinned on the Company’s ability to maintain working capital discipline and secure timely contributions from the acquired business.
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