The Pakistan Credit Rating Agency (PACRA) has assigned a long-term credit rating of “A” (Single A) and a short-term rating of “A1” (A One) to Pak Elektron Limited. The ratings denote a low expectation of credit risk emanating from a strong capacity for timely payments of financial commitments.

The ratings reflect the company’s diversified revenue base that ensures stability in earnings, despite a highly competitive environment. While aligning its products and processes to changing market dynamics, the management has been successful in withstanding the competitive pressures through continuous initiatives at product upgradation and development, cost optimisation, and emphasis on product quality. The capital structure of the company, though relatively highly leveraged at present, is expected to improve with augmentation in the equity base through increasing trend in profitability and planned issue of preference shares in the near future.

About the company: PEL was incorporated as a public limited company in 1956, and is currently listed on all the stock exchanges in Pakistan. The company is a leading manufacturer of power equipment and home appliances products. The power division primarily manufactures distribution transformers, energy meters, and switchgears. To achieve further diversification, the company has entered into turnkey construction of grid stations and manufacturing of power transformers. The appliances division mainly specializes in refrigerators and split air conditioners, while television and microwave oven has also been added to the product range during the year. PEL has an extensive dealership network, spread nationwide with over one thousand and five hundred outlets and an adequate after sales service network.

The majority ownership in the company was acquired by Saigol Group in 1978, having diversified business interests in textiles, energy and automobiles sectors. While effectively family controlled, the company is run by professional management.