PACRA Upgrades the Entity Ratings of EcoPack Limited.

The ratings of EcoPack Limited ("EcoPack" or the "Company") reflect its strengthened financial performance, an established market position, and continued investment in capacity expansion to support future growth. The ratings also take comfort from the Company’s long-standing relationships with leading beverage manufacturers, experienced management, and sound governance framework. EcoPack continues to maintain a strong presence in the PET packaging sector, which derives its demand primarily from the carbonated and non-carbonated soft drinks, bottled water, edible oil, and other consumer-oriented industries. Its longstanding relationships with leading customers and suppliers support business continuity and operational resilience. The current customer base of the Company is strong and high-profile. Established procurement arrangements and supply chain coordination help ensure the availability of raw materials, while vendor flexibility provides an additional cushion against unforeseen operational requirements and supply disruptions. As per management, the Company holds an estimated market share of 10.2% in the preforms segment and 32.4% in the bottles segment as of FY26. Furthermore, the Company is targeting a ~20% market share in the preform segment in FY27. Currently, the Company’s annual production capacity utilization stood at 82% for the preform segment and 52% for the bottles segment at the end of FY26, with bottle capacity increasing following the installation of a new blowing machine. Subsequently, a preform machine, acquired at a cost of ~PKR 750mln and financed through debt, became operational in July 2026, adding annual production capacity of ~230mln preform units. The additional capacity is expected to support higher preform volumes and strengthen market penetration. During FY26, the topline of the Company stood at PKR ~6.5bln (FY25: PKR ~7.2bln) with a major contribution of PET Bottles clocking in at 64% followed by PET Preforms clocking in at 36%. Profitability strengthened, with gross profit margin increasing to 20.6% in FY26 (FY25: 16.8%) and operating profit margin improving to 13.8% (FY25: 11.3%). The net profitability rose to ~PKR 415mln (FY25: ~PKR 340mln), reflecting improved cost efficiencies and lower finance costs. During FY26, leverage increased to 43.3% (FY25: 33.9%), primarily due to borrowings for capacity expansion, while the equity base strengthened to PKR 1,991mln (FY25: PKR 1,667mln) on improved profitability and earnings retention. Going forward, management remains focused on balancing shareholder returns with earnings retention to support operational needs and future growth. The management also aims to sustain growth momentum through continued investment in solar energy project, and ESG practices, while maintaining cost discipline. These initiatives are expected to diversify the product portfolio, strengthen market positioning, and support revenue growth by catering to evolving customer requirements.
The ratings depend on the Company's ability to sustain the improvement in margins and internal cash generation while translating the recently added capacity into volumetric growth. The ratings remain contingent on the Company’s ability to manage its elevated leverage through sustained earnings generation and prudent dividend distributions, ensuring adequate internal capital retention to support ongoing expansion without exerting undue pressure on its financial risk profile.

About the Entity
EcoPack was incorporated as a public limited Company in 1992 and listed on the Pakistan Stock Exchange in 1994. The Company operates with two core product lines: i) PET Preforms and ii) PET Bottles. The overall control of the Company lies with a seven-member Board of Directors. Mr. Asad Ali Sheikh, the current Chairperson and a Non-Executive Director, brings over 40 years of experience and serves on the Audit Committee. The Company’s CEO, Mr. Hussain Jamil, has been associated with EcoPack since its inception. He is a seasoned businessman with over 50 years of experience, providing strategic leadership and deep industry insight.