Press Release

VIS Reaffirms Entity Ratings of Thal Limited

Lahore, January 15, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Thal Limited (‘THAL’) at ‘AA/A-1+’ (Double AA /A-One Plus). The medium to long term entity rating of ‘AA’ signifies high credit quality and strong protection factors. Risk is modest but may vary slightly from time to time because of economic conditions. The short-term rating of ‘A-1+’ signifies highest certainty of timely payment, short-term liquidity including internal operating factors and/or access to alternative sources of funds is outstanding and safety is just below risk free Government of Pakistan’s short-term obligations. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on January 18, 2023.

Ratings draw strength from strong financial profile and diversified presence of the company’s sponsor, House of Habib. In addition, THAL has established market position and track record in auto parts industry along with technical collaborations with leading international players. The ratings take into account diversified business risk profile that include auto parts, building materials and packaging products along with investments in the energy sector.

During FY23, overall net sales decreased mainly on account of lower sales of auto parts. A decreasing trend in gross margin has been witnessed that stood lower primarily due to lower capacity utilization and exchange rate fluctuations. Despite higher income emanating from investment portfolio, net profit decreased mainly on account of decrease in sales and lower margins. Net profit increased in 1QFY24 on account of lower operating expenses and higher other income. FFO decreased during FY23 and 1QFY24 on account of lower profitability from core operations and remained positive. During the ongoing year, THAL has mobilized a long-term loan for investment in one of its power projects through a subsidiary, however, gearing and debt leverage remained low. The ratings are sensitive to improvement in sales, margins and coverages while maintaining low leveraged capital structure to remain aligned with the outstanding ratings.

For further information on this rating announcement, please contact the undersigned at 042-35723411-13 (Ext: 8010) or email at

Maham Qasim
Group Head Rating

Applicable Rating Criteria: Industrial Corporates (May 2023)

VIS Issue/Issuer Rating Scale

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