Press Release

VIS Reaffirms Entity Ratings of Macter International Limited

Karachi, June 13th, 2023: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the entity ratings of Macter International Limited (Macter or the Company) at 'A/A-2'. The long-term rating of ‘A’ signifies good credit quality; protection factors are strong. Risk is modest but may vary with the possible changes in the economy. The short-term rating of ‘A-2’ signifies good certainty of timely payment; liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on April 20, 2022.
The assigned ratings incorporate a low business risk profile in the pharmaceutical sector in the long run given the relatively non-elastic nature of demand. Nevertheless, stringent regulatory framework, including dependence on Drug Regulatory Authority of Pakistan (DRAP) for approvals related to launch of new products and pricing increase, tends to create profitability pressures. Moreover, a significant portion of the product’s cost is foreign currency denominated, which exposes pharmaceutical companies to exchange rate risk.

Rating also takes into account Company’s move to rationalize its portfolio mix amid surging input costs and increased local currency volatility. However, the Company has not shifted away from its focus on Research & Development (R &D) and introduced several new products in FY22. As new products take time to gain traction in the market, the rationalization of product portfolio may impact topline in the short term. Meanwhile, with a renewed focus towards the international market, the Company has increased investments in advanced molecule projects Macter is also actively pursuing opportunities to enter the vaccine development market. However, the spend on expanding into international markets and increasing R&D may impact margins of the Company in the medium term.

Assessment of financial profile reflects a slight increase in revenues in FY22, driven by higher prescription sales. Macter managed to slightly improve its margins in FY22, mainly due to higher export sales and lower financial costs, however, in the current year margins are impacted largely on account of currency devaluation. Macter substantially minimized its short-term and long-term obligations through right issuance resulting in lower financial risk. Moreover, liquidity profile also remains sound with improvement in current ratio and working capital cycle.

For further information on this rating announcement, please contact Mr. Saeb Jafri (Ext: 202) or the undersigned (Ext: 207) at (021) 35311861-66 or email

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (May 2023)

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