Press Release

VIS Reaffirms Entity Ratings of Treet Corporation Limited

Karachi, January 20, 2025: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of Treet Corporation Limited (‘Treet’ or ‘TCL’ or ‘the Company’) at ‘A-/A2’ (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 'A2' suggests good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned rating remains ‘Stable’. Previous rating action was announced on December 15, 2023.

Treet was incorporated in Pakistan on January 22, 1977, as a public limited company. Its shares are listed on the Pakistan Stock Exchange (PSX). The primary business activity of the company involves the manufacturing and sale of razors and razor blades. In addition, TCL operates across multiple business segments, including the production and sale of motorbikes, corrugated boxes, soaps and paper and board. The company has substantial investments in subsidiaries, including a 56% shareholding in Renacon Pharma Limited (RPL), which manufactures hemodialysis concentrates; a 96% shareholding in Treet Battery Limited (TBL); 100% ownership of Treet Holding Limited; and a 97.11% stake in First Treet Modaraba.

Assigned ratings take into account the Company's business risk profile, characterized by its extensive market presence across key segments, including blades and razors, batteries, and hemodialysis concentrates. The Company operates in sectors with varying risk levels: medium in blades and razors due to moderate product demand and exposure to raw material price volatility; high to medium in the battery industry influenced by fluctuating input costs and competition; and low in the hemodialysis concentrate sector with steady demand but operational challenges. The establishment of a subsidiary in the United Arab Emirates is also taken into account, aiming to enhance global distribution networks and address logistical challenges.

Assigned ratings also incorporate the Company's financial risk profile, including its profitability, capitalization, liquidity, and coverages. The profitability profile reflects increased consolidated revenue driven by domestic sales growth and new product introductions, offset by the impact of elevated finance costs on net margins. The capitalization profile shows an expanded equity base following a rights issue, with improvements in gearing and debt leverage ratios despite substantial debt levels. The liquidity profile has gradually improved through profit retention and equity issuance, though remained constraint. The coverage profile remains sound with adequate debt service coverage, though affected by elevated financial charges.

Going forward, the Company's planned further divestment in its subsidiary and funds generated are planned to be utilized to reduce borrowing while strengthening capitalization and liquidity indicators. The expansion into new product lines and international markets through the newly established subsidiary may influence the business risk profile of the company. However, exposure to external cost pressures, competition, and operational constraints may continue to impact profitability and liquidity metrics. The assigned ratings will be sensitive to the Company's ability to improve its key financial indicators, and any significant changes may affect future assessments.

For further information on this ratings announcement, please contact on 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 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .