Lahore, August 12, 2022 (PPI-OT):The ratings recognize Ghani Chemical Industries Limited’s (GCIL) leading and prominent position in the industrial and medical gases sector in terms of production capacity. The board of directors of GCIL has decided to merge G3 Technologies Limited (formerly Service Fabric Limited) with/into GCIL for ultimate PSX listing which is a positive sign and will add comfort to the assigned ratings. During 9MFY22 the top-line of the Company showed ~10%growth and margins also showed improvement at all levels. All three plants remained operational at optimum capacity utilization.

GCIL’s fourth 105TPD dedicated plant became operational and started to cater to the demand of renowned industrial customer and would play a pivotal role in top-line and bottom-line growth. Going forward the Company is expected to receive benefits from (a) rising demand from the industrial segment which will be translated into better financial performance (b) Capacity expansions with a new plant with sustained existing capacity utilization (c) reduce reliance on borrowings from financial institutions with rationalized leveraging policy (d) stock exchange listing to capitalize future growth.

The ratings are dependent on the Company’s ability to effectively utilize enhanced capacities. At the same time, management of financial risk, particularly debt coverages, remains important, wherein any further deterioration would have negative implications for the ratings. Consistent growth in market share and improved margins would support ratings.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com