PACRA Maintains Entity Ratings of Medipak Limited

Medipak Limited (‘Medipak’ or ‘the Company’) is a prominent Pakistani public limited company specializing in life-saving intravenous (IV) infusion therapy solutions and administration sets. The ratings reflect on their long-standing position as a leader in the domestic market for both IV solutions and the essential sets used to administer them. Medipak, in collaboration with Fresenius AG, has established operational excellence in the competitive Pakistani IV infusion market, driven by rising healthcare awareness, improved access, aging population, and chronic disease prevalence. Back in 1982, Medipak made a contribution to creating self-reliance within infusion therapy in Pakistan by pioneering local manufacturing at the Kot Lakhpat (KLP) plant in Quaid-e-Azam Industrial Estate, with an area of 4.53 acres with a constructed area of 118,000 sq ft which includes a wide range of production facilities. During 2015, the Company carried out CAPEX to develop a second facility in Sundar Industrial Estate, built on 2 acres of land with a constructed area of ~100,000 sq ft (both facilities are cGMP-compliant). Medipak holds a nationwide marketing channel with over 200 distributors & 150 sales professionals. Currently, the pharmaceutical industry faces inflation, interest rates, and PKR devaluation, increasing raw material prices and operating costs, impacting margins and profitability. During 9MFY24, Medipak’s topline showed 10.8% quarter-over-quarter growth; however, down from 34.8% in FY23. Furthermore, the bottom line has experienced a decline, a trend observed industry-wide. According to management, Medipak holds approximately 15.79% of the local intravenous (IV) market share. The sponsors have a solid understanding of the business. However, the board consists of close family member sand lacks independent oversight, indicating room for improvement. The company is managed by professional leadership, and appropriate internal control systems are in place throughout the organization. Establishing a formal internal audit department would further improve the control environment. Going forward, Medipak is actively exploring new market niches to navigate the competitive landscape. The company is strategically diversifying its product portfolio by adding various small-volume parenteral (SVP) molecules, which are currently undergoing necessary regulatory approvals. This diversification is expected to significantly contribute to the company’s revenue stream. Moreover, the company is considering an expansion into the deregulated non-essential drugs segment, which is expected to enhance future profit margins and drive potential growth. The financial risk profile is demonstrated by adequate cashflows, coverages, and working capital cycle. Its capital structure is moderately-leveraged, mainly encompassing STBs.
The ratings are dependent on the Company’s ability to maintain its leadership position within its business niches in a dynamic market environment. Achieving consistent revenue growth, improving profit margins, and delivering on prudent financial management, as outlined in company projections, will remain critical.

About the Entity
Medipak Limited was founded in Pakistan on January 14th, 1982 as a public limited company. It is a leading Pakistani manufacturer and marketer of life-saving infusion therapy solutions. Established by Dr. Khalid J. Chowdhry, the company offers a comprehensive range of products, including IV administration sets, dialysis solutions, and various pharmaceuticals. CEO Mr. Naveed K. Chowdhry boasts over 20 years in the IV sector, while MD Ms. Naureen Khalid brings over 3 decades of expertise. Together, they guide a team of qualified professionals from diverse backgrounds.