VIS assigns long-term rating of 'A-' to TBL

June 22, 2026 (MLN): VIS Credit Rating Company Limited has assigned initial entity ratings of 'A-/A2' (Single A Minus/A Two) to Treet Battery Limited (TBL), with a Stable outlook.

The medium-to-long-term rating of 'A-' denotes good adequate credit quality with adequate protection factors, while the short-term rating of 'A2' reflects a good likelihood of timely repayment of short-term obligations backed by sound liquidity.

The assigned ratings factor in TBL's moderate market share in the energy storage batteries segment, its recent entry into the lithium-ion battery market in Pakistan, and competitive strength through its premium-priced maintenance-free battery segment.

The ratings also reflect well-established OEM relationships and improving financial risk indicators, notwithstanding exposure to volatile lead prices and evolving demand dynamics.

Production capacity rose to 1.5 million units in FY25 from 1.2 million in FY24, with sales largely driven by maintenance-free batteries.

Although revenues declined in 9MFY26 owing to reduced demand for deep-cycle batteries, TBL maintained superior gross margins relative to major peers.

Earnings remain under pressure despite lower financial charges and support from non-core income.

On the financial risk front, conversion of sponsor loans into equity has significantly reduced leverage indicators.

However, liquidity pressure persists, with a low current ratio reflecting an asset-liability mismatch.

VIS noted that the industry is gradually transitioning toward lithium-ion batteries, supported by EV policy initiatives and growing demand for energy storage system (ESS) batteries.

Sustained improvement in core profitability, liquidity, and coverage ratios, along with successful execution of TBL's lithium-ion strategy, will remain critical for the ratings going forward.

TBL, a subsidiary of Treet Corporation Limited, manufactures lead-acid batteries under the Daewoo brand and is expanding into lithium-ion solutions through strategic partnerships.

The company operates a production facility in Faisalabad and is backed by an experienced management team and a sound governance framework.

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