PACRA maintains the entity ratings of DIC Pakistan Limited

The ratings of DIC Pakistan Limited ("DIC" or the "Company") reflect its strong sponsor profile, established market position, and sound financial standing. The assigned rating also acknowledges the Company's good governance framework, a strong control environment, and an experienced management team. DIC is predominantly engaged in the manufacturing of a range of printing inks, with production closely tied to the demand for food products and other consumer goods. In CY24, the Company has further diversified its product portfolio by introducing Digital Inks, UV Wood Coatings and adhesives to its offerings. As represented by the management, DIC holds the largest market share in printing ink industry in Pakistan. Due to the economic slowdown during CY23, the capacity utilization levels declined. However, the Company maintained its growth trajectory with a 14% increase in topline revenue, reaching PKR 10.6bln (CY22: PKR 9.4bln), primarily due to higher printing ink prices.
For 9MCY24, the Company has reported a topline of PKR 8.78bln. Rotogravure ink continues to be the leading revenue contributor, accounting for ~52%, followed by Flexographic Ink-Water based at ~13%. In CY23, the Company's profit after tax (PAT) rose by 59%, reaching PKR 1,067mln compared to PKR 671mln in CY22, driven primarily by increased gross profit through effective cost control strategies and timely price increases. As of 9MCY24, PAT was recorded at PKR 788mln. The strong group structure and associated synergies have helped the management in reaping the benefits of catering to higher demand with effective inventory management.
In CY23, leverage decreased to 38.3% from 42.4% in CY22. However, as of 9MCY24, leverage rose to 65.4%, primarily due to a PKR 1.3bln long-term loan to support the construction of a purpose-built manufacturing facility at Kasur.
The Parent Company’s resolute commitment to supporting the Company in case of any financial need remains intact. The ratings are dependent upon the management’s ability to improve margins while sustaining its market share. Prudent management of the working capital, and maintaining sufficient cash flows and coverages are also imperative for the ratings. Any significant decrease in margins and coverages will impact the ratings.

About the Entity
DIC Pakistan Limited was incorporated as a public limited Company in July 1994 as a Joint Venture between DIC Asia Pacific Limited and Packages Limited by holding 45% and 55% shares respectively. Syeda Henna Babar Ali is the Chairperson of the Board and Mr. Ismail Hussain Naqvi is the CEO of the Company. Mr. Ismail joined DIC as Chief Operating Officer in June 2019 and took over as CEO from January 1, 2021. He has more than 26 years of diversified professional experience in various positions in different companies. A team of qualified individuals associates him.