Press Release

VIS Reaffirms Entity Ratings of Pakistan Cables Limited

Karachi, May 16, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Pakistan Cables Limited (PCL) at ‘A/A-1’ (Single A/A-One). Outlook on the assigned ratings is ‘Stable’. The long-term rating of ‘A’ signifies good credit quality. The short-term rating of ‘A-1’ signifies high certainty of timely payment. The previous rating was announced on February 02, 2021.

The assigned ratings incorporate PCL’s position as the leading wire & cable manufacturer in the country, strong brand strength and reputation as a provider of quality cables. Business risk profile incorporates strong growth witnessed in the industry as housing and construction activities picked up in the country, which allowed the industry players to record strong growth. . The industry also remains exposed to rising commodity prices and exchange rate volatility. Overall competitive intensity in the sector remains high. Ratings also incorporate ongoing capital expenditure towards capacity addition to further support market position. PCL is in the process of setting up a new manufacturing facility in Nooriabad, for expansion and de-bottlenecking of several production processes to enhance efficiencies. Assigned ratings take into account sound corporate governance framework as indicated by effective board oversight, stable and professional management team and focus on transparency and disclosures.
Topline of the company improved on the back of higher volumes due to strong demand supported by activity in construction sector which allowed the Company to post higher margins despite rising commodity prices and rupee devaluation. Higher turnover and improved margins along with reduced financial charges resulted in uptick in profitability. Going forward, while demand growth is expected to streamline, management expects it to remain positive.

Liquidity profile of the company remains sound, however, going forward, the rising commodity prices and the geo-political situation together with inflationary pressures and capacity expansion, working capital requirements are expected to increase for the Company. Maintenance of liquidity indicators in line with the assigned ratings will remain important. Capitalization indicators depict an increase on account of capital expenditure financing. Going forward, while gearing levels are expected to remain elevated in the medium term, profit retention for maximizing equity growth will remain important for assigned level of ratings

For further information on this rating announcement, please contact Ms. Sara Ahmed or the undersigned (Ext: 306) at (021) 35311861-66 or email at

Javed Callea

Applicable Rating Criteria: Industrial Corporates (August 2021)

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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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