PACRA Assigns Positive Outlook to the Entity Ratings of Medipak Limited

Medipak Limited (‘Medipak’ or ‘the Company’) is a prominent and only public limited company specializing in life-saving intravenous (IV) infusion therapy solutions, offering in both LDPE (Low-Density Polyethylene) and PP (Polypropylene) packaging. The Company boasts a diverse product portfolio, with a primary focus on IV solutions and administration sets, complemented by ophthalmic preparations and dialysis solutions. The ratings reflect on their long-standing position as a leader in the domestic market for IV solutions. Medipak, in collaboration with Fresenius AG, has established operational excellence in the competitive Pakistani IV infusion market, driven by rising healthcare awareness, improved access, an aging population, and chronic disease prevalence. Back in 1982, Medipak made a contribution to creating self-reliance within infusion therapy in Pakistan by pioneering local manufacturing at the Kot Lakhpat (KLP) plant in Quaid-e-Azam Industrial Estate, which includes a wide range of production facilities. During 2015, the Company carried out CAPEX to develop a second facility in Sundar Industrial Estate, developed with Chinese technology, with exclusive double euro-cap manufacturing. Both facilities are compliant with current Good Manufacturing Practices (cGMP) and are supported by ISO 17025-certified laboratories, along with integrated ISO 9001, 14001, 45001, and 13485:2016 certified quality management systems. The Local IV solution market is competitive with the existence of numerous players. As per the management representation, Pakistan’s total IV solutions market has an installed capacity of ~500mln units, in which the current production stands at ~250mln units, and Medipak has an estimated share of ~13%. During 9MFY25, Medipak’s topline showed ~10.2% quarter-over-quarter decline, primarily due to a dip in volumes impacted by ongoing balancing, modernization, and replacement (BMR) activities, which are expected to conclude by year-end. However, the Company’s gross and net margins improved, supported by cost efficiencies and a reduction in finance costs. The Company’s sponsors have a solid understanding of the business with decades of experience. However, the board consists of close family members and lacks independent oversight, indicating room for improvement. The Company is managed by professional leadership, and appropriate internal control systems are in place throughout the organization. Establishing a formal internal audit department would further improve the control environment. Going forward, Medipak is strategically pivoting towards high-demand products to capitalize on emerging market trends. Additionally, the Company is exploring expansion opportunities to enhance market share and long-term sustainability. The financial risk profile is demonstrated by adequate cash flows, coverages, and working capital cycle. Its capital structure is low-leveraged, mainly encompassing STBs.
The ratings are contingent on the Company’s ability to maintain its leadership position within its business niches in a dynamic market environment. Achieving consistent revenue growth, improving profit margins, and delivering on prudent financial management and performance, outlined in the latest projections, will remain critical.

About the Entity
Medipak Limited was founded in Pakistan on January 14th, 1982, as a public limited company. It is a leading Pakistani manufacturer and marketer of life-saving infusion therapy solutions. Established by Dr. Khalid J. Chowdhry, the Company offers a comprehensive range of products, including IV administration sets, dialysis solutions, and various pharmaceuticals. The CEO, Mr. Naveed K. Chowdhry boasts over 20 years in the IV sector, while Ms. Naureen Khalid, the MD, brings over 3 decades of expertise and knowledge. Together, they lead a team of qualified and skilled professionals from diverse backgrounds.