VIS maintains entity ratings of Lucky Core Industries

March 06, 2025 (MLN): VIS Credit Rating Company Limited (‘VIS’) maintains the entity ratings of Lucky Core Industries Limited (PSX: LCI) at AA/A1+, the latest press release issued by VIS showed.

Medium to long term rating of “AA” indicates high credit quality; protection factors are strong.

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

Short-term rating of “A1+” suggests, strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors.

Outlook on the assigned ratings has been changed to ‘Positive’ from ‘Stable’.

Previous ratings action was announced on February 28, 2024.

LCI, a diversified conglomerate listed on the Pakistan Stock Exchange, operates across multiple sectors.

It offers products such as soda ash, polyester staple fiber (PSF), chemicals, pharmaceuticals, animal health products, and agricultural inputs.

In September 2024, the Company acquired a manufacturing facility, along with selected pharmaceutical products, brands, and associated trademarks from Pfizer Pakistan Limited.

It also acquired assets from other relevant Pfizer group entities.

LCI is a part of the Yunus Brothers Group (YBG). YBG's diversified portfolio spans across cement, automobiles, textiles, power, chemicals, healthcare, and other sectors.

Assigned ratings consider the diversified and low business risk profile of the Company, supported by its leadership position in the soda ash business and significant market share in polyester segment.

The Company's exposure to medium and low risk sectors, such as agri-sciences, chemicals and pharmaceutical segments, further diversifies its operations.

Ratings also factor in the significant market presence of its sponsors, Yunus Brothers Group (YBG), with a strong financial profile and presence across multiple industries.

Assigned ratings consider the Company’s financial risk profile, including sustained growth in revenues supported by growth across all businesses.

Profitability increase has been maintained through operational efficiencies and multiple growth initiatives despite challenging economic conditions.

The Company maintains a conservative capitalization structure, supported by internal cash generation and a low gearing ratio.

Liquidity is underpinned by significant cash reserves and short-term investments.

Coverage ratios remain healthy on account of strong internal cash flows and a prudent approach to debt utilization.

Going forward, ratings will remain sensitive to the Company’s ability to sustain profitability across its diversified business segments and maintain its conservative capitalization and liquidity profiles.

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