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RAM Ratings assigns first time AA1/Stable/P1 ratings to MR DIY Group
Published on 06 Mar 2026.
RAM Ratings has assigned corporate credit ratings of AA1/Stable/P1 to MR D.I.Y. Group (M) Berhad (MR DIY or the Group). The same ratings apply to the Group’s proposed Islamic Medium Term Notes Programme of up to RM5.0 bil, together with an Islamic Commercial Papers Programme with a sub limit of RM1.0 bil.
The ratings are underpinned by MR DIY’s established position as Malaysia’s largest home improvement and general merchandise retailer, supported by a leading market presence, strong brand recognition and resilient earnings profile. As at end-January 2026, the Group operated 1,599 stores across Malaysia and Brunei, with a store footprint and revenue base that significantly exceed those of its competitors’. The Group’s value for money positioning and broad product portfolio underpin stable demand, even amid softer consumer sentiment.
MR DIY offers over 17,000 stock keeping units spanning household and furnishing, hardware, electrical and stationery products, with products largely comprising essential goods. Multiple store formats enable the Group to address diverse consumer segments nationwide, reinforcing its competitive positioning.
The Group has demonstrated consistent earnings growth since 2017, with revenue increasing at a five-year compound annual growth rate of 14% to reach RM4.95 bil in FY Dec 2025. Operating profit before depreciation, interest and tax margins have remained robust at between 23% and 26%, outperforming peers’. This performance reflects economies of scale, disciplined cost management, centralised procurement and direct sourcing.
MR DIY’s cash flow generation is strong, with operating cash flows exceeding RM900 mil annually over the past three years. Despite expected high lease-adjusted gearing levels of 0.93 times-0.98 times (end-December 2025: 0.46 times) post-sukuk issuance, debt protection metrics are projected to remain commensurate with the assigned ratings.
Funds from operations debt coverage is projected to exceed 0.40 times over the next two years (historically 0.50 times-0.90 times) while adjusted debt-to-OPBDIT - an alternative leverage indicator - will stay conservative at 1.59 times-1.78 times.
The Group’s negative same store sales growth moderates the ratings, reflecting weak consumer sentiment and the impact of rapid store expansion. MR DIY is also exposed to foreign exchange volatility, given its reliance on imported goods, particularly from China which accounts for approximately 70% of the cost of goods sold. Additionally, MR DIY operates in a highly competitive retail environment, facing competition from other home improvement retailers, dollar stores, general merchandise chains and online platforms.
Analytical contacts
Karin Koh, CFA
(603) 2708 8237
karin@ram.com.my
Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my
The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.
RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.
Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.
Published by RAM Rating Services Berhad
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