Press Release
VIS Assigns Initial Entity Ratings to Renacon Pharma Limited
Karachi, February 19, 2026: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A2’ (Single A Minus/A Two) to Renacon Pharma Limited (‘RPL’ or ‘the Company’). 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' signifies good likelihood of timely repayment of short-term obligations with sound liquidity factors. Outlook on the assigned rating is ‘Stable’.
The assigned ratings reflect RPL’s strong market position as Pakistan’s leading manufacturer of hemodialysis concentrates, with an estimated market share of around 65%, non-cyclical demand dynamics, sponsor support from Treet Corporation Limited (‘Treet’), and significant capacity expansion in FY25. The ratings also incorporate the Company’s internationally recognized quality certifications, and sound internal controls.
RPL has transitioned from a small-scale operation into a structured industrial entity under Treet’s umbrella. A key milestone was achieved in FY25, with the commissioning of a 40-acre manufacturing facility in Faisalabad, which tripled production capacity compared to the previous plant, positioning the Company to meet rising domestic and international demand.
The business risk profile is supported by the essential nature of hemodialysis treatment, and a growing patient base. Competitive strengths stem from economies of scale, automation, quality certifications, and industry presence, though external pressures persist, including cost inflation, regulatory oversight, and price sensitivity in institutional tenders. Net sales have steadily increased, mainly on the back of volumetric growth. Margins, though remaining sound, weakened in FY25 due to inflationary pressures, higher freight, depreciation, administrative, and finance costs. Consequently, FFO and debt service coverage ratios declined, while gearing and leverage remained elevated, due to higher borrowings mobilized for expansion. Sponsor support is evident from the fact that the majority of short-term debt has been provided by Treet.
RPL intends to focus on strengthening its domestic footprint, enhancing exports, and diversifying its product portfolio, while also improving operational efficiencies. Leverage indicators are projected to improve, with the partial conversion of long-term debt into equity during FY26. Moreover, the Company plans an IPO in FY27, which is expected to enhance its financial flexibility. The ratings would remain sensitive to management’s above-mentioned initiatives to improve the Company’s financial risk profile, going forward.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf