VIS Maintains Stable Outlook on Ittehad Chemicals Limited Ratings

Karachi, VIS Credit Rating Company Limited has reaffirmed the entity ratings of Ittehad Chemicals Limited at 'A-/A-2', indicating a stable financial outlook. The ratings reflect good credit quality with sound liquidity factors and company fundamentals, suggesting a stable capacity for timely payment and adequate access to capital markets.

According to VIS Credit Rating Company Limited, the rating assessment for Ittehad Chemicals Limited (ICL) acknowledges the company's solid position in Pakistan’s chemical industry, dating back to its origins in 1962 and subsequent privatization in 1995. ICL, with major operations in caustic soda and a broad range of chemicals, has shown adaptability by expanding its product offerings and adjusting to market demands with the introduction of a new LABSA-SLES plant.

The ratings are underpinned by ICL’s medium to low business risk profile, influenced by factors like its significant market share, the capital-intensive nature of the chemical industry, and a robust clientele including major multinational companies. Financially, ICL has demonstrated growth through increased selling prices and enhanced export sales, notably in calcium chloride, leading to improved profit margins and strengthened capitalization.

The stable outlook reflects the company’s strong performance, despite challenges such as rising operating and financing costs. VIS’s analysis suggests that ICL's ratings will remain contingent on the management of its debt profile in light of future capital expenditure (CAPEX) plans, maintaining the balance between growth initiatives and financial stability.