Press Release

VIS Assigns Initial Entity Ratings to P.D.H Laboratories (Private) Limited

Karachi, December 30, 2019: VIS Credit Rating Company Ltd. (VIS) has assigned initial entity ratings of ‘BB+/B’ (Double B Plus/B) to P.D.H Laboratories Private Limited (PDH). Medium to long-term rating of ‘BB+’ denotes that obligations deemed likely to be met. Protection factors are capable of weakening if changes occur in the economy. Overall quality may move up or down frequently within this category. Outlook on the assigned rating is ‘Stable’.

Assigned ratings to PDH incorporate experience of sponsors in the pharmaceutical sector and induction of professional senior management team over the last 18 months. Ratings also reflect low business risk profile of the pharmaceutical industry where revenues of the sector will continue to be supported by growing population and increasing life expectancy (implying increase in elderly population) and continuous emergence of diseases. Ratings also take into account healthy sales growth and improvement in profitability profile during FY19 and in the ongoing year. However, the ratings remain constrained by leveraged capital structure, limited debt servicing cushion due to sizeable debt repayments and low cash flow coverage of outstanding obligations.

P.D.H Laboratories (Private) Limited (PDH) is a small but growing player in the pharmaceutical sector. The Company has been engaged in the manufacturing and sale of pharmaceutical products for around five decades. PDH’s product portfolio comprises 40+ products catering to around 8 therapeutic segments. Top four leading revenue generating therapeutic areas are Vitamins (29%), Penicillin (28%), Cephalosporin (16%) and Analgesics/Anti-inflammatory agents (15%) which represented more than four-fifth of revenue base in FY19. Sales depicted healthy growth in the outgoing year mainly on the back of increased capacity utilization. Going forward, growth in revenues will primarily be a function of new products launches (14 new product launches are planned over the rating horizon). VIS expects significant increase in sales over the rating horizon. Ratings remain dependent on reduction in leverage indicators, maintaining sound debt servicing ability and improving cash flow coverages.
For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext: 201) at (021) 35311861-66 or email at

Javed Callea

Applicable Rating Criteria: Industrial Corporates (May 2016)

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 not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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