Lahore, December 15, 2022 (PPI-OT):Ghulam Rasool and Co’ holds a prominent position in the construction industry since several decades. It was established by Mr Ghulam Rasool in 1970 and later inherited by his three sons and their respective families who are the joint owners of the business. The shareholders have stakes in multiple companies simultaneously, thus strengthening the group’s financial strength. The company has delivered multiple, public and government projects, and usually embarks upon large infrastructure projects in collaboration with different foreign JV partners, which in their own right are established institutions.
The Company has a no-limit contract license and is focused mainly on specialized nature projects on civil construction, irrigation works, and hydel-power development projects. The functional and reporting responsibilities of the management team are demarcated. The control environment needs to be strengthened. The company has a defined strategy of building assets, required for its operations as well as investment purposes, through surplus cash. The company’s profitability has improved. Debt is procured for project financing in nature of short-term working capital.
Leveraging also includes non-funded exposure which is an integral part of the business model. Equity base of company is strong; the same along with ongoing projects with foreign partners spanning over a number of years and ensuring revenue generation in the coming years, support the financial risk profile of the Company. It is further boosted by proficient WC cycle, which reflects on improving operational efficiency of the company. The company’s revenue in FY22 surged multiple times and was recorded at PKR 15.36 billion, owing to stout projects pipeline, hence the upgrade.
The ratings are dependent on the sustainability of the business and its financial structure; sustaining a steady revenue stream and financial risk profile. Financial metrics need to be upheld as well. Any prolonged downturn in business volume can have a detrimental effect on the rating. The company is working on a number of initiatives to strengthen itself internally and externally, which will improve its longevity and sustainability. Improving governance and internal controls framework would have further positive connotation for the ratings.
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