Lahore, January 31, 2023 (PPI-OT):Techno Time Construction (Pvt.) Limited (TTC or the Company) holds experience in the construction industry of Pakistan for nearly a decade. TTC has delivered multiple, public and government projects of which the completion spanned a number of years. TTC also works on different infrastructure projects in collaboration with different JV partners. TTC was originally focused on roads and bridges construction, but recently the Company has also started focusing on housing societies development.

During FY22, TTC is able to just sustain its topline in line with previous years and reported a revenue of PKR 5.1bln (FY21: PKR 5.7bln, FY 20: PKR 5.0bln). The company’s gross margins also remain range bound FY 22: 25.4% (FY21: 24.8%, FY 20: 27.3%), despite the increase in the overall cost of project completion due to inflationary pressure, and highly competitive bidding in large contracts. Liquidity in terms of cash flows remained suppressed due to limited funds from operations, though the working capital management remained strong.

However, volatility associated with award of projects and hence, sustainability of revenues, cannot be overlooked as the business pipeline is not swelled up. The business funding needs are met by non-funded lines of banks and JV partner’s guarantees given on its behalf. Resultantly, it’s non-funded exposure is relatively less as significant support comes from leading JV partners in bearing non-funded exposure. The equity base of the Company is adequate, especially when compared with the non-funded obligations assumed by the Company.

The ratings remain exposed to TTC’s presence in the cyclic sector owing to political instability, and a volatile economic environment. The ratings will remain dependent on upholding financial metrics involving the timely completion of key commercial projects without any significant cost and time overruns. In addition, sustaining the topline with collection efficiency will remain imperative. Improvement in governance is also important and needs to be strengthened.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com