Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the entity ratings for Zahir Khan and Brothers (ZKB), a leading construction firm in Pakistan, at 'A' for the long term and 'A2' for the short term, with a stable outlook. Despite a substantial increase in the firm's topline in the fiscal year 2024, the profit margin did not see a proportional rise, highlighting challenges in the financial landscape.

According to a statement by The Pakistan Credit Rating Agency Limited, ZKB has established itself as a prominent contractor in the country, executing large-scale infrastructure projects independently and through joint ventures. The firm benefits from international donor agency funding, which offers protection against financial and political uncertainties while enforcing high standards.

ZKB's financial growth is tied to easing economic pressures and the timely start of several awarded projects, including significant Public-Private Partnership initiatives. The firm's topline reached PKR 20,851 million in FY24, a notable rise from the previous year's PKR 11,207 million. However, the profit for FY24, including a revaluation gain, stood at PKR 8,796 million, down from PKR 10,360 million in FY23.

The company has begun exploring new funding avenues, including short-term borrowings, to meet its working capital needs. While non-funded exposure is expected to increase with the expanding project portfolio, ZKB's robust equity base and investment property portfolio offer financial stability.

The sustainability of ZKB's business and financial structure relies on the successful execution of upcoming projects. The management is committed to enhancing governance and corporate transparency by transitioning to a corporate entity, ZKB Construction Private Limited, as part of its modernization efforts.