The Pakistan Credit Rating Agency Limited
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Muhammad Harris Ghaffar

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PACRA Maintains Entity Ratings of Getz Pharma (Pvt.) Limited

Rating Type Entity
(30-Dec-22 )
(30-Dec-21 )
Action Maintain Maintain
Long Term AA- AA-
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Getz Pharma (herein referred to as “Getz" or the "Company") is the leading pharmaceutical Company in the Pakistan pharma industry currently ranked at No. 1 according to the latest IQVIA report, the global pharmaceutical data provider. Getz Pharma is an international research-driven, branded generic pharmaceutical company specializing in the formulation development, manufacturing, testing and marketing of a wide range of quality, affordable medicines and the only company whose manufacturing facility, in Pakistan, is approved by the World Health Organization, Geneva (WHO). The Company’s manufacturing facility, named Astola, state of the art plant equipped with international standard medicine manufacturing procedures have been awarded the First LEED Platinum Certification for a pharmaceutical plant in South Asia, by the U.S. Green Building Council (USGBC). The board of Getz comprises experienced and professional experts. The Board size is considered adequate as the management is mindful of the corporate governance requirements and fulfils the applicable statutory criteria. The Company has a diversified portfolio in chronic and acute therapeutic disease segments. The business growth is driven by organic portfolio growth, capacity expansion and new launches. In the pharma sector, the price established at the time of product launch gives the Companies an opportunity to set their margins competitively pinnacle in that particular product. Getz, as one of the top 100 exporters of Pakistan gives them some immunity against the country’s current economic scenario pertaining to PKR devaluation. The pharma has some industry-specific challenges which hinder its growth and profitability matrix like a high cost for imported APIs due to PKR devaluation & DRAP pricing policy. With an adequate top 05 products concentration, the revenues are dominated by the local market and the export window is diverse. The Company’s gross margins have shown upward trajectory trends over the last three years. The net profitability margins are strong with the history of dividend pay-outs. In the coming years, some new brands are also in pipeline. The financial risk profile of the Company is strong with comfortable coverages and cashflows. The working capital management of the Company is stretched depict industry norm. Capital structure is leveraged where borrowings are comprised of long-term and short-term tenor to support brand development and working capital requirements. More than 50% of Getz borrowing consists of subsidized borrowings from SBP provides some cushion against escalation in the policy rate.
The ratings are dependent on the continued sustainability of financial performance indicators. Adequacy of cash flows, sustainability of coverages and the availability of resources to make debt-related payments remain critical. Meanwhile, compliance with internally-defined leveraging metrics is a prerequisite. Sanguine governance practices are essential.

About the Entity
Getz Pharma is a Private Limited pharmaceutical company; operating in Pakistan since 1995. It is a wholly-owned subsidiary of Development Holding Asia Limited (DHAL). The two-member BoD (nominee of DHAL) comprises experienced professionals. Mr. Khalid Mehmood, CEO & MD of the Company has over 35 years of experience in the pharmaceutical and health care industry. Before joining Getz, he worked in progressively responsible positions with major pharmaceutical companies in the US, South America, Far East, and Africa, in technical operations and marketing. He is an MBA in Marketing from Rutgers School of Management, Rutgers University, USA also holds BS (Bachelors of Science) in Industrial Engineering from California State University, USA. He has been the president of the World Wide Fund for Nature (WWF) for 6 years.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.