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HomeEquityPharmagen Ltd benefits from the new CPI-linked pricing criteria: PACRA

Pharmagen Ltd benefits from the new CPI-linked pricing criteria: PACRA

January 2, 2019 (MLN): Pakistan Credit Rating Agency has maintained entity ratings of Pharmagen Limited at ‘BBB’ for long-term and ‘A2’ for short-term, with a stable outlook forecast.

According to the press release issued by PACRA, the ratings reflect Pharmagen Limited’s strong business fundamentals. While product pricing has been a challenge, the new CPI-linked pricing criteria has allowed an increase in prices with respect to inflation, indicating a positive sign.

The company imports majority of their raw material, thus increased currency fluctuation and pricing risk. However, PL is poised to derive benefits from group synergies in the form downward integration at front end. This could help PL, to diversify in different segments and reduces the concentration risk.

The ratings are dependent on the company's ability to sustain margins. Meanwhile, management of debt (current and planned), thereby impacting coverages, is considered important. Furthermore, external factors such as any adverse changes in the regulatory framework and weakening of financial profile owing to delays in cash flow receipts, may impact the ratings.

Copyright Mettis Link News

Posted on: 2019-01-02T12:06:00+05:00


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