PACRA Upgrades Entity Ratings of Getz Pharma (Pvt.) Limited

Getz Pharma Pakistan (Private) Limited (herein referred to as “Getz Pharma" or "the company") is the largest pharmaceutical company in the Pakistan pharma industry being ranked at No.1 for the last few years as per IQVIA reports. Getz Pharma is an international research-driven, branded generic pharmaceutical company specializing in the formulation development, manufacturing, testing, and marketing of a wide range of quality, affordable medicines and one of the few companies whose manufacturing facility, in Pakistan, is approved by the WHO, Geneva. The company’s manufacturing facility, named Astola, is a state-of-the-art plant that is the only LEEDS (Leadership in Environment Engineering & Design) certified plant with PLATINUM ratings by the US Green Building Council, U.S.A, in South Asia. Getz Pharma is the only pharmaceutical company listed among the top 50 exporters of the country as per SBP’s recent statistics. The board of Getz Pharma comprises experienced and professional experts. The Board size is adequate as the management is mindful of the corporate governance requirements and fulfills the applicable statutory criteria. The company has an indigenous and diversified portfolio in chronic and acute therapeutic disease segments comprising over 140 products. The business growth is driven by organic portfolio growth, capacity expansion, and new launches. During recent years, the pharma sector has been facing some industry-specific challenges, including significant cost escalation owing to hyperinflation and massive PKR devaluation as the industry is predominantly reliant on imports to meet its API needs, Also, the elevated interest rates have increased the costs of borrowing resulting in hindrance to growth and profitability matrix as the sector has limited ability to pass on the impact to consumers. However, Getz Pharma has shown impressive resilience as evidenced by the substantial growth of ~31% in the top line of the company during 9MCY23 (~24%, CY22). Moreover, the company has been able to expand its exports which now constitute ~30% of the total revenue, providing a natural hedge against adverse exchange rate fluctuations. As a result, the company has sustained healthy profitability margins. Going forward, Getz Pharma will benefit from the synergies emerging from its international presence. The financial risk profile of the company is strong with comfortable coverages and healthy cashflows augmented by an upright working capital cycle. Capital structure is leveraged where borrowings are comprised of long-term and short-term tenors to support acceleration, brand development in the exporting markets, and working capital requirements.
The ratings are dependent on the continued sustainability of financial performance indicators. Adequacy of cash flows, sustainability of coverages and the availability of resources to make debt-related payments remain critical. Meanwhile, compliance with internally-defined leveraging metrics is a prerequisite. Sanguine governance practices are essential.

About the Entity
Getz Pharma is a Private Limited pharmaceutical company, operating in Pakistan since 1995. It is a wholly owned subsidiary of Development Holding Asia Limited (DHAL). The two-member BoD (nominee of DHAL) comprises experienced professionals. Mr. Khalid Mahmood, (CEO & MD) has over 35 years of experience in the pharmaceutical industry. Before joining Getz, he worked in progressively responsible positions with major pharmaceutical companies in USA. He has an MBA from Rutgers University, USA. Mr. Raymond Simkins is the President of Getz Bros. and the Getz Group. Mr. Simkins has ~48 years of experience in managing companies in various regions. Before taking over as the President of Getz Bros. he was the chairman and chief executive of Getz Bros. Inc., Japan,