The Pakistan Credit Rating Agency Limited
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Raniya Tanawar

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

Rating Type Entity
(30-Dec-20 )
(31-Dec-19 )
Action Maintain Initial
Long Term AA- AA-
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Getz Pharma is the second-largest pharmaceutical company of Pakistan, by market share and sales revenues. The pharmaceutical industry has witnessed a high rate of sustained growth over the years. Cost-efficiencies as well as demand inelasticity are benefiting the industry players. CPI-linked pricing criteria has allowed an increase in prices with respect to inflation and indicated a positive sign for the sector. The strength of Getz Pharma is based on the product suite that it markets in the local market and also in the export. The hallmark of the company is the accreditation that it has obtained from World Health Organization (WHO), Geneva as well as it is the first and only company in Pakistan that is certified and accredited by the European based Pharmaceutical Inspection Cooperation Scheme (PICs). The company has the research base in Pakistan as well as the production facilities; through which it feeds multiple countries around the globe. Financial performance of the company remained unaffected during Covid-19 outbreak, rather the demand front gained momentum on account of it, enabling the company to reserve good revenues. With an adequate product concentration, the revenues are dominated by local market and the export window is diverse. The profitability margins are strong with the history of dividend pay-outs. Lately, the debt book witnessed rise however, when compared to equity and cashflows it remains well managed. The leveraging of Getz Pharma is related to expansion project, which the company has been largely funding hitherto with internally generated equity. The production from the expansion is expected in coming year, yet the current operations remain capable of servicing the debt. This project is being envisaged as a giant leap for the company of which success is pivotal yet appears to be probable. The governance framework may improve in line with the standards for the large corporates
The ratings are dependent on the continued sustainability of financial performance indicators. Adequacy of cash flows and the availability of resources to make debt-related payments remains 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; the operations of entity have been 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 Mehmood, Chief Executive & Managing Director since the inception Company has over 34 years of experience in the pharmaceutical and health care industry. Before joining Getz Pharma as its CEO, he worked in progressively responsible positions with major pharmaceutical companies in the US, South America, Far East, and Africa, in technical operations and marketing. He is an MBA in Marketing from Rutgers School of Management, Rutgers University, USA also holds BS (Bachelors of Science) in Industrial Engineering from California State University, USA. He has been the president of the World Wide Fund for Nature (WWF) for 6 years. He is supported by an experienced core management team.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.