Karachi, VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Izhar Construction Private Limited (ICPL) to 'A/A-1' from its previous position, indicating a good credit quality with strong protection factors and high certainty of timely payment. This upgrade reflects the company's strong business risk profile, backed by a robust sponsor profile and a leading position in the high-risk civil construction and engineering industry. The outlook on the ratings remains stable, signifying confidence in the company's future performance.

According to VIS Credit Rating Company Limited, the Lahore-based ICPL, part of the larger Izhar Group active since 1959, has demonstrated a strong performance across its construction, ready mix concrete sales, and agricultural farming segments. The upgrade is underpinned by the company's effective cost control measures and a solid project pipeline that assures stability even amidst fluctuating demand in the construction sector.

The improvement in ratings also highlights ICPL's financial robustness, characterized by continuous top-line growth, successful contract renegotiations leading to sound margins, and a historically debt-free balance sheet. These factors have significantly enhanced the company's capitalization, coverage ratios, and liquidity metrics, contributing to the positive rating action.

VIS's announcement also notes the sensitivity of the ratings to the ongoing uncertainties in Pakistan's political and economic environment, which could impact the construction and real estate industry. The ability of ICPL to navigate these challenges while ensuring the timely materialization of its projects will be critical in maintaining its upgraded ratings.

The rating upgrade is a testament to Izhar Construction's longstanding presence and evolving success in the construction industry, demonstrating the company's strategic management and operational strengths in a competitive and risk-prone sector.