VIS reaffirms The Searle Company's long-term rating at 'AA-'

October 02, 2026 (MLN): The Searle Company Limited (PSX:SEARL) has had its entity ratings reaffirmed by VIS Credit Rating Company Limited (VIS) at 'AA-/A1' (Double A Minus/A One), with a 'Stable' outlook.

The previous rating action was announced on September 30, 2025.

The medium to long-term rating of 'AA-' indicates high credit quality and strong protection factors.

Risk is modest but may vary slightly from time to time because of economic conditions.

The short-term rating of 'A1' indicates a strong likelihood of timely repayment of short-term obligations, with excellent liquidity factors.

VIS said the rating reflects SEARL's established position in Pakistan's pharmaceutical sector, supported by recognised brands, a diversified therapeutic portfolio and stable demand for medicines.

The company's association with the International Brands Limited Group provides strategic support through established distribution and management expertise.

The rating also takes into account the recovery in profitability. The return to profit in FY25 largely reflected a substantially lower impairment charge and reduced finance costs, while underlying operating profit declined.

In 9MFY26, stronger sales, improved product availability, pricing adjustments and a more favourable product mix led to a marked improvement in gross margins and earnings.

The planned expansion into biological products and GCC markets offers further diversification, although sustained contributions from these initiatives remain to be established.

Financial risk has improved following the repayment of acquisition-related debt, resulting in a more conservative capital structure, stronger debt coverage and improved cash generation.

According to VIS, the rating remains sensitive to the sustainability of operating margins, management of imported input costs and working capital, and the impact of planned capital expenditure on the company's financial profile.

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