Press Release

VIS Maintains Entity Ratings of Treet Corporation Limited

Karachi, December 15, 2023: VIS Credit Rating Company Limited maintains entity ratings of Treet Corporation Limited ('TREET' or 'TCL' or 'the Company') to 'A-/A-2' (Single A-Minus/A-Two). 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 'A-2' indicates 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 ratings has been changed to 'Stable' from 'Rating Watch - Developing'. Previous rating action was announced on December 15, 2022.

Treet Corporation Limited, incorporated in Pakistan in 1977, is a public limited company listed on the Pakistan Stock Exchange. The company has a market share of 85% in the local market and exports to over 45 countries. TREET operates in various segments, including razors, batteries, soaps, motorbikes, packaging, and has holdings in Renacon Pharma for hemodialysis products. Recently, the company has underwent a demerger, separating its battery business into Treet Battery Limited, effective April 2019. TREET is also executing a capital injection and debt reduction plan, with a rights issue underway to secure PKR 2.5 bln n in funding. These developments support the change in outlook of the ratings.

Assigned ratings incorporate the business risk profile, incorporating the Company's exposure to economic factors such as exchange rate volatility, supply disruption caused by import constraints amid depleting foreign exchange reserves and rise in policy rates. Improvement in the profitability profile during FY23 was achieved against the backdrop of challenging economic conditions in the country.

Assigned ratings also consider the financial performance of the Company on a consolidated basis during the period under review. Despite challenges, the company witnessed improved topline and gross margins with focus on export markets and effective cost pass-through. However, net margins remained constrained by escalating financing costs due to rising interest rates. Capitalization and liquidity metrics remained under stress, with relief expected from the ongoing rights issue by the Company. The coverage profile, however, continues to be healthy, providing comfort to assigned ratings.
Going forward ratings will remain sensitive to TCL's success in its ongoing right issue to inject fresh equity into the Company providing support to its capitalization and liquidity indicators. Improvement of these metrics will be key consideration for future ratings. Moreover, maintenance of profitability and coverage profile commensurate with assigned ratings will also be important factors.

For further information on this ratings announcement, please contact Mr. Saeb Muhammad Jafri (Ext: 202) or the undersigned (Ext: 207) at 021-35311861-64 or email at

Sara Ahmed

Applicable Rating Criteria:
Industrial Corporates (May 2023)
VIS Issue/Issuer Rating Scale

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