PACRA Maintains Entity Ratings of CCL Pharmaceuticals (Pvt.) Limited

CCL Pharmaceuticals (Pvt.) Limited (‘CCL’ or ‘the Company’) is primarily engaged in the manufacturing and marketing of branded generic pharmaceuticals products. The ratings reflect CCL’s reputable business profile in pharmaceutical industry of Pakistan with legacy-built 55+ years and exports in 23+ countries. With growth in population and rising health issues, the sector recorded a revenue of ~PKR 705bln during CY22 with a YoY growth of ~14.3% (CY21: PKR~616bln); while pharmaceutical manufacturing also grew by ~22.7% YoY. Dependency on imported APIs (basic raw material) is significant, thus sustaining efficient supply chain is of utmost priority for local manufacturers. However, non-reliance on any single country for imported APIs provides mitigation against potential disruptions. The Company’s flagship products include brands like Sita Met, Pulmonol, Maxflow, Paraxyl CR and Tacavir, contributing the highest in revenues. CCL has installed state-of-the-art GMP compliant manufacturing facility enabling to produce dry powder, liquid orals, solid orals, liquid injectable, and powder injectable. Substantial CapEx was also made to upgrade manufacturing facility in order to align with PICs & other international compliances. During review period, the Company acquired PICs compliant plant from a renowned pharmaceutical company to enhance its overall production capacity. CCL has been accredited as one of the fast-growing pharmaceutical entities among top 25 players in Pakistan following sponsors’ vision to capitalize growth trajectory. The Company is governed by qualified professionals having diversified experience at upper-level hierarchy in MNCs and reputed local pharmaceutical setups. CCL is cognizance of corporate governance structure; reflected by committees formed at board & management level. The oversight role is played by the stockholders in collaboration with independent advisors on the board. Further, the Company has successfully adopted a formal group structure and now comes under the umbrella of ‘CCL Holding Pakistan.’ The Company recorded revenue growth of ~30.0% at end Jun’23 with adequate profitability matrix. The ratings draw comfort from constant demand of products and strong market share in Anti-Diabetic, Anti-Depressants & Expectorants. According to IQVIA report, CCL’s ranking improved to 16th on YTD basis. Financial risk profile is demonstrated by reasonable working capital management and healthy cash flows. The Company’s capital structure is leveraged; primarily encompassed of short-term borrowings. Going forward, CCL attempts to (a) ramp up its market share with new molecules and through brand acquisitions (b) explore export destinations by benefiting from PICs and other international compliances.
The ratings are dependent on upheld profits and market share while retaining sufficient cash flows and coverages. Nevertheless, adherence to maintain its debt metrics at an acceptable level is a prerequisite.

About the Entity
CCL Pharmaceuticals (Pvt.) Limited was incorporated on April 28th, 1985 under the Companies Ordinance, 1984 (now the Companies Act, 2017) as a private limited concern. It is involved in the manufacturing and sale of all sorts of medicines, drugs and allied activities. At present, the sponsoring family is 2nd generation and owns entire stake of the Company through CCL Holding – a subsidiary of Dilsons (parent entity). Shareholding is divided equally among family members; Mr. Kashif Sajjad - Board's Chairman and acting CEO, Mr. Asim Dilawar, Mr. Hassan Zubair & Mr. Nadeem Bin Javaid through a HoldCo.