VIS Upgrades Credit Rating for Thatta Cement on Strong Fiscal Performance

Karachi: VIS Credit Rating Company Limited (VIS) has revised the medium to long term entity ratings for Thatta Cement Company Limited (TCCL) to ‘A’ from ‘A-‘, acknowledging the company’s enhanced financial stability and profitability. This announcement was made on September 12, 2024, marking a positive shift in the company’s financial outlook, as confirmed by a press release issued by VIS.

According to information available from the Pakistan Stock Exchange (PSX), the upgrade reflects TCCL’s sustained improvement in financial performance throughout the fiscal year 2024, underpinned by a notable rise in profitability and liquidity. The company’s revenue saw a significant increase, driven by higher cement dispatches and escalated prices, which have been supported by a strategic shift to domestically sourced coal and the initiation of a 3.5 MW solar energy project. These factors have substantially reduced production costs, boosting profitability margins.

TCCL has demonstrated robust debt servicing capabilities with a conservative capital structure, characterized by the absence of long-term debt and minimal short-term borrowing. The liquidity position of the company is also reported to be solid, ensuring good credit quality with adequate protection factors. However, VIS notes that risk factors could vary with potential economic shifts.

The outlook on the new ratings remains stable, suggesting confidence in TCCL’s ability to maintain its financial health. The previous rating was issued on May 14, 2024, which makes this upgrade a significant indicator of TCCL’s ongoing positive trajectory in the competitive cement industry.

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