Press Release

VIS Reaffirms Entity and Sukuk Ratings of Aspin Pharma (Private) Limited

Karachi, October 19, 2020: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the entity ratings of Aspin Pharma (Private) Limited (APL) at ‘A/A-2’ (Single A/A-Two). Rating of APL’s secured Sukuk issue of Rs. 1,500m has also been reaffirmed at ‘A’ (Single A). Outlook on the assigned ratings is ‘Stable’. Long term rating of ‘A’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. The previous rating action was announced on October 3, 2019.

The assigned ratings take into account the inelastic nature of demand of the prescription drugs in the pharma sector due to favorable population demographics, poor hygiene standards, and increasing incidence of diseases in the country. Moreover, major products of APL have sound brand value and enjoy high relative market share. Ratings also factor in concentration in product portfolio as sizeable proportion of total revenue is generated from five flagship products. Business strategy has been aligned to focus on expanding and diversifying product portfolio. Onset of COVID-19 has extended the timeline for the launch of new products. Nevertheless, a number of new product launches are in the pipeline.

Financial risk profile assessment indicates improving profitability profile, adequate liquidity and elevated leverage indicators. Volumetric increase resulted in improvement in topline of the company, while margins were also reported higher on account of improved product mix and cheaper sourcing of raw material. Going forward, profitability is projected to depict healthy increase over the rating horizon due to projected growth in sales supported by organic growth from existing products and launch of new products and improving margins due to projected price increases, improved efficiencies and better product mix. Ratings remain dependent on realization of projected sales and profitability metrics to ensure sound debt servicing ability given the increasing debt repayments.

Overall liquidity profile is considered satisfactory as improvement in profitability translated to higher cash flows. Leverage indicators have improved on a timeline basis but continue to remain elevated. Given net debt repayments and enhanced internal capital generation, leverage indicators are expected to further improve over the ratings horizon. Ratings remain dependent on projected improvement in leverage indicators on a timeline basis. Material deviation of actual capital expenditure incurred beyond projected levels may exert pressure on ratings.

For further information on this rating announcement, please contact the undersigned (Ext. 306) or Mr. Narendar Shankar Lal (Ext: 203) at 021-35311861-70 or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (May 2019)

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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .