The Pakistan Credit Rating Agency Limited
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Kanwal Ejaz

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PACRA upgrades Entity Ratings of Pharmagen Limited

Rating Type Entity
Action Upgrade Maintain
Long Term A- BBB+
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Pharmagen Limited operates in a specific segment of the pharmaceutical industry: API (Active Pharmaceuticals Ingredients). This is mostly and predominantly fed through imports. Pharmagen Limited is a domestic player, claiming leading position amongst the local players which is not a large universe. Pharmagen Limited has built its profile over the year and serves some top players of the larger industry. The company has grown and augmented its position and is seen fortifying its production capabilities and product range. The able leadership has spearheaded the company’s strategy and operations. Lately the company has solicited interest of another big player from the local industry who has injected sizeable fresh equity into the company . This is diluting the financial burden and unlocking the hidden potential of the company. The growth prospects is sanguine. The management is focusing (a) process improvement (b) cost optimization (c) enriching product sweet. The control and governance prospects are continued to improve as a result of new prospects. The management intends to release reliance on funded facilities on need basis. The profitability and financial matters will improve gradually.
The ratings are dependent on success roll out of the envisaged strategy. The respective market position needs to be maintained and profitability must be aligned to the improving size. Any dilution in business on financial profile is unwarranted.

About the Entity
Pharmagen Limited is a public limited-unquoted Pharmaceutical company operating in Pakistan since 1990. The company is engaged in the manufacturing and sale of Pharmaceutical products and over the years it has become the leading producer of APIs (Active Pharmaceutical Ingredients) in Pakistan. Pharmagen in majority owned by Pervez Hussain’s family (44%), while other strategic partners include Rasheed Khan’s family (12%), Maj. Gen. (Retd.) Rahim Khan’s family along with Kashmir Education Foundation (17%), and Mr. Shamim Ahmed and his family (27%).

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.