VIS reaffirms SITC ratings at A+/A2

June 18, 2026 (MLN): VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Sitara Chemical Industries Limited (PSX: SITC) at ‘A+/A2’ (Single A Plus/A Two), while maintaining a ‘Stable’ outlook on the assigned ratings.

According to VIS, the medium-to long-term rating of ‘A+’ indicates good credit quality, with adequate protection factors, although risk factors may vary with possible changes in the economy.

The short-term rating of ‘A2’ denotes a good likelihood of timely repayment of short-term obligations, supported by sound short-term liquidity factors.

The previous rating action was announced on June 02, 2025.

VIS stated that the ratings reaffirmation is anchored by the company’s well-established position in the chemicals industry, along with its experienced management team and sound corporate governance framework.

The assigned ratings also show SITC’s strategic initiatives, including the initiation of a 50MW coal-fired power plant and ongoing plans to diversify its product mix.

According to the rating agency, the company’s revenue grew steadily in FY25 and remained firm during 9MFY26, mainly supported by higher average selling prices.

However, capitalization and liquidity ratios weakened due to increased borrowings undertaken for the procurement of raw materials and machinery related to the power plant project.

Despite the pressure on capitalization and liquidity metrics, debt coverage indicators improved, supported by stronger operational cash flows.

VIS noted that, to address pressure on its liquidity position, the company is in advanced-stage discussions with commercial banks for reprofiling its debt mix by converting short-term borrowings into long-term financing facilities.

Going forward, VIS said the assigned ratings will remain highly sensitive to improvements in liquidity and capitalization metrics, alongside the company’s ability to maintain healthy revenue generation and cash flow coverage levels.

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