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The Pakistan Credit Rating Agency Limited
Press Release

Date
23-Jan-20

Analyst
Sehar Fatima
sehar.fatima@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Initial Entity Ratings to Bilal Steel Mills (Private) Limited

Rating Type Entity
Current
(23-Jan-20 )
Action Initial
Long Term BBB-
Short Term A3
Outlook Stable
Rating Watch -

Bilal Steel is a distinct player in the steel industry. The company's business model is designed around fulfilling demand from multiple segments, where in which sustainability is stronger fundamentally. Lately, Bilal has ventured into retail market and intends to build meaningful presence therein. The ratings reflect small market share of the company in a large fragmented industry. Bilal Steel has large orders in hand which bodes well for the company. The Company has improved the quality of auditor by switching to a firm included in SBP panel. The company operates on adequate business margins in order to compete in local market, hence Bilal Steel's profitability is commensurate to its size.The Company has depicted growth, which is an evidence of superiority of its business model. The volumes are expected to rise which will help in its future projections. The Company holds an adequate financial risk profile; absence of long term financing. The debt on balance sheet pertains to short term borrowings. Bilal Steel is a private limited company with two member board – hence board oversight is desired.

The ratings are dependent upon the company’s ability to sustain its market presence. Enhancement of business profile with improvement in financial risk indicators is crucial. Moreover, strengthening of governance framework including quarterly financial statement.

About the Entity
Bilal Steel Mills (Private) Limited (Bilal Steel), is a private limited company incorporated in 2013, it is primarily engaged in manufacturing and sale of billet steel and D formed steel bars. The company operates through its registered head office located in Lahore. The plant is located on Sheikhupura Road with installed capacity of 87,500 tonnes of re-rolling and 42,000 tonnes of furance. The entire shareholding of the company is owned by Malik Family.

The overall control of the Company vests in two member board of directors of the sponsoring family. Mr. Farrukh Shahzad Malik, the founder of the company is the key man behind the business. He is the CEO and Chairman of the company, whereas his son, Mr. Bilal Malik is the Managing Director. The company employs an able team of professionals.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.