Karachi: VIS Credit Rating Company Limited has upgraded the short-term entity ratings of Macter International Limited from 'A/A-2' to 'A/A-1', reflecting a strong likelihood of timely repayment of short-term obligations and excellent liquidity factors. The long-term rating remains at 'A', indicating good credit quality with strong protection factors.

According to VIS Credit Rating Company Limited, the upgrade reflects the overall stability of the pharmaceutical sector, driven by consistent demand and low economic sensitivity. Factors like population growth, high disease prevalence, and new health challenges are likely to sustain demand, although profitability is pressured by regulatory limits on pricing and high reliance on imported raw materials.

Macter International has demonstrated significant topline growth in FY23, attributed to new product launches and aggressive marketing campaigns. Despite a slowdown in sales due to strategic scaling back in tender business to control costs, the company's financial health remains robust, underscored by strong liquidity and a sound capitalization profile.

The company's future ratings will hinge on its ability to maintain liquidity and capitalization while navigating inflationary pressures and currency fluctuations. The planned investment to upgrade facilities for export compliance is expected to bolster profit margins moving forward.