The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains Entity Ratings of Etimaad Engineering (Pvt.) Limited

Rating Type Entity
Action Maintain Maintain
Long Term BBB- BBB-
Short Term A3 A3
Outlook Stable Stable
Rating Watch - -

The ratings demonstrate Etimaad’s strength which stimulates from its sustained operational history. The business has optimal mix of contracts in its domain and has managed to complete reasonable number of contracts in Pakistan. The slowdown in revenue for the current period has been primarily due to delay on some sizable projects. The pipeline is healthy; therein for the sake of sustainable long term growth, management follows a balanced approach aiming to gain more share in different lines of businesses. The entity is following a pyramid strategy; the top being mega projects (EPC), followed by construction and lastly maintenance related projects. The entity is eyeing further diversity in its revenue stream in the near future from specific dimension of real estate development project. Management efforts to recover previous years losses is expected to materialize by end-FY19. Company is adequately leveraged and determined to reduce its conventional borrowing over a short term horizon. The performance of the company rests with projects in hand and timely completion. The sponsors have demonstrated their commitment by operationally supporting the business by providing security and personal guarantees to obtain financial facilities. Meanwhile, strengthening of business development structure by inducting expert and experienced professionals is considered a key catalyst for upcoming projects.
Rating is dependent upon several contracts successfully completed and upcoming projects undertaken by management to streamline its business for improved profitability, which is pivotal for considerable growth.

About the Entity
Established by a team of professionals in May 2007, Etimaad is an integrated engineering and contracting company. The company is engaged in providing turnkey, retrofit and debottlenecking solutions for power/oil & gas sector, project management, general industrial construction (Civil, Mechanical, E&I), shut-down and turnaround services. Etimaad's two-members board is chaired by Mr. Mohammad Sohail Shafique, who holds 25.6% shareholding, is an Engineer with more than two decades of experience with renowned organizations. Mr. Mazharuddin Ansari (late)'s family, holds 37.4% shareholding. Mr. Farooq Hussain Mughal, President & CEO,is a fellow chartered accountant, holds 26.9% shareholding and is supported by a qualified team.

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.