Pakistan Credit Rating Agency Limited assigns entity ratings to Descon Oxychem Limited

Lahore: PACRA has assigned a long term entity rating of “A” (Single A) and short term rating of “A2” (A Two) to DOL. These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The ratings recognize the company’s leading position in the local H2O2 market, supplemented by efficient production process, sound technological infrastructure, and effective control environment.

The management is pursuing a focused strategy to enhance the product awareness, which would give boost to product demand while ensuring sustainable margins.

DOL has significant reliance on gas as a basic raw material wherein, though it has relatively small gas needs, given the prevailing energy shortage in the country this would remain a concern. The company’s cash flows, and in turn coverages, remain adequate against challenges of temporary gas shortage and price fluctuations.

Ratings draw comfort from DOL’s association with a financially sound and diversified business group – Descon – that in the past has demonstrated support.

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