Press Release

VIS Reaffirms Entity Ratings of Multan Chemicals Limited

Karachi, August 17, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Multan Chemicals Limited (‘MCL’ or ‘the Company’) at ‘A-/A1’ (Single A Minus/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’ denotes strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned rating remains ‘Stable’. Previous rating action was announced on June 10, 2025.

MCL is the third-largest domestic player in the medical and industrial gases segments, operating three production facilities across Multan and Faisalabad since 2014. The assigned ratings incorporate the Company’s sound capital structure and strong liquidity profile, underpinned by historically low gearing and robust cash flow generation. These strengths provide a cushion against inherent business risk, particularly the Company’s price-taker nature, which results in volatility in gross margins. From a governance standpoint, the continued engagement of a non-QCR auditor remains a constraint; transitioning to a QCR-compliant auditor is considered important for future rating considerations.

MCL is currently pursuing a multi-pronged growth strategy, encompassing capacity expansion and operational diversification over the next three years. The Company plans to double its industrial gas production capacity, enter the LPG supply segment, and gradually expand into the real estate business. The LPG venture is expected to be fully financed through internal cash generation, while a prudent level of external funding will be utilized for expansionary capital expenditure. Going forward, key rating sensitivities will hinge on the Company’s ability to execute its ASU expansion and LPG diversification within targeted timelines, without exerting undue pressure on its financial risk profile.

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 August 17, 2026 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.