PACRA Assigns Initial Entity Ratings to Treet Battery Limited

Treet Battery Limited (“TBL” or “the Company”) is engaged in the manufacturing and sale of lead-acid batteries, with a strategic focus on maintenance-free and deep-cycle variants, marketed under the “Daewoo Battery” brand. The Company was established to introduce locally manufactured maintenance-free technology-based batteries, positioning itself as a pioneer in this segment. TBL’s product portfolio is positioned in the premium segment, reflecting a focus on higher performance and reliability compared to conventional offerings. The Company operates a technologically advanced manufacturing facility based on Korean technology, supported by a comprehensive in-house testing and quality control system, ensuring consistent product reliability. The domestic lead-acid battery sector is at an inflection point, shaped by evolving energy consumption patterns, a recovering automobile market, and a gradual shift in storage technologies. Demand remains anchored in the replacement segment, the most consistent source of offtake. Within this, backup power batteries dominate in value terms, reflecting sustained reliance on uninterrupted power across residential and industrial users, while automobile battery replacements account for a higher share in volume, supported by the sizeable on-road vehicle base. The recovery in automobile sales, underpinned by improving macroeconomic conditions, easing inflation, and a more favorable interest rate outlook, is generating incremental demand for OEM-linked sales. At the same time, rising adoption of solar solutions is broadening the demand base, with batteries serving as a critical storage component amid elevated electricity tariffs and shifting consumption patterns. Despite these positive demand drivers, the sector remains characterized by intense competition and relatively high installed capacity, which collectively constrain margins. Additionally, volatility in raw material prices, particularly lead, and exchange rate movements continue to influence cost structures and profitability across industry participants. Currently, the industry is also witnessing a gradual transition from conventional lead-acid to lithium-ion technologies, driven by longer lifecycles, higher efficiency, and compatibility with modern applications. To support this transition, TBL has entered into a strategic partnership with a leading Chinese manufacturer, positioning the Company within the evolving domestic energy storage market, particularly in high-end solar and industrial backup segments. During FY25, the Company’s topline remained stable and recorded at ~PKR 8,844mln in FY25 (FY24: ~PKR 8,733mln). Concurrently, the Company achieved a notable improvement in its profitability profile across all levels, driven by cost efficiencies and lower finance costs. This positive trajectory sustained its momentum into the 1HFY26 as well. The Company’s financial risk profile is categorized by modest coverages, cash flows, and an adequate working capital cycle. While TBL’s capital structure appears highly leveraged, risk is partly mitigated by its debt mix, with ~61% comprising a parent-funded project loan and the remainder short-term working capital facilities. Going forward, the Company is actively pursuing targeted cost-rationalization initiatives and adopting lean operational practices to further improve its profitability profile.
The ratings remain contingent upon TBL’s ability to sustain its top-line growth trajectory and enhance its market share within a competitive operating environment. Continued improvement in the profitability profile, coverage metrics, and leverage indicators is essential. Compliance with the shared financial projections will continue to be paramount.

About the Entity
Treet Battery Limited (TBL) is a public limited company, listed on the Pakistan Stock Exchange (PSX) in 2023 following its strategic demerger from First Treet Manufacturing Modaraba (FTMM). The parent company, Treet Corporation Limited, holds ~86.18%, and Treet Holdings Limited holds a stake of ~1.81% in the Company. The Board of Directors comprises eight members, where Syed Shahid Ali serves as the Chairman, while Syed Sheharyar Ali holds the position of CEO.