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

VIS Credit Rating Company has reaffirmed The Searle Company Limited's entity ratings at 'AA-/A1', with a 'Stable' outlook, according to Mettis Global. Its earlier rating action dates from September 30, 2025. The long-term 'AA-' grade denotes high credit quality, while the short-term 'A1' suggests the company is very likely to meet near-term debt payments on schedule.

VIS linked the rating to Searle's established footing in Pakistan's drug industry, backed by well-known brands, a varied therapy range and steady demand for medicines. The company's ties to International Brands Limited Group bring strategic support through distribution networks and management know-how. Profitability has recovered: the FY25 return to profit mainly reflected a much smaller impairment charge and lower finance costs, although underlying operating profit declined.

Gross margins and earnings improved in 9MFY26 on stronger sales, better product availability, pricing changes and a more favourable mix, VIS said. Repaying acquisition-related debt has produced a sturdier capital base, stronger debt coverage and better cash generation. The rating remains sensitive to sustained operating margins, handling of imported input costs, working capital and the effect of planned capital expenditure. Plans for biological products and GCC markets add diversification, though sustained contributions are yet to be shown.