VIS lifts ICL entity rating, outlook turns stable

May 07, 2026 (MLN): Ittehad Chemicals Limited (PSX:ICL) has had its entity ratings upgraded by VIS Credit Rating Company Limited (VIS) from 'A-/A2' to 'A/A1', which reflects the company's strengthened financial and strategic position.

The upgraded long-term rating of 'A' signals good credit quality with adequate protection factors, while the short-term rating of 'A1' showcases strong likelihood of timely repayment of short-term obligations backed by excellent liquidity.

The outlook has been revised from 'Positive' to 'Stable', following the previous rating action announced on April 29, 2025.

The rating upgrade comes on the back of ICL's strategic push to diversify its product portfolio and shift towards greener chemical capabilities through investment in a biomass power plant.

The company has demonstrated resilience by maintaining a largely stable financial risk profile despite external pressures, and has improved its competitive positioning relative to industry peers. Cash flows and debt coverage indicators have shown improvement, even as profit margins remain under some pressure.

Looking ahead, ICL's planned capacity expansion through its flaker plant is expected to enhance value addition and strengthen the product mix.

However, the anticipated rise in debt  largely tied to biomass project financing may weigh on capitalization indicators.

The company remains confident that projected cost efficiencies and improved post-commissioning margins will support its financial targets.

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