Press Release

VIS Reaffirms Entity Ratings of Power Chemical Industries Limited

Karachi, June 24, 2024: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of Power Chemical Industries Limited (‘’PCIL’’ or ‘’the Company’’) at '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 remains Stable. Previous Rating action was announced on December 06, 2023.

Power Chemical Industries Limited, founded by late Mr. Muhammad Afzal in 1977 as a small glue-manufacturing unit, has evolved into a comprehensive chemical products manufacturer. Originally, a family-owned venture, it transitioned to a private limited company in 2008 and later became a public (unlisted) limited company in 2015. The Company specializes in paint and coating chemicals, plasticizers, adhesives, and textile chemicals. Currently, the shareholding is vested with the sons of late Mr. Muhammad Afzal.

Assigned ratings incorporates the medium to low business risk profile of PCIL, supported by its moderate cyclicality, high barrier to entry owing to capital-intensive nature of the industry. A diverse product portfolio also provide assurance to the assigned ratings. Additionally, a strong clientele with major multinationals further provide comfort to the ratings.

The ratings also consider the financial risk profile of the Company in FY23 buoyed by growth in topline primarily due to higher local sales driven by price adjustments. Consequently, the gross margin improved while net margin witnessed a contraction because of higher finance cost. The coverage profile weakened on account of higher finance cost paid during the year. Capitalization metrics remained stable while the liquidity metrics commensurate with the assigned ratings. Moreover, improvement in the Company’s 9MFY24 profitability further bolster the assigned ratings.

For further information on this ratings announcement, please contact at 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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .