PACRA Upgrades Entity Ratings of Ghulam Rasool & Co (Pvt) Ltd
Ghulam Rasool & Co' has held commendable position in the construction industry for several decades. The subsequent three generations of the sponsoring family are the joint owners of the business. The functional and reporting responsibilities of management team are demarcated. The company has delivered multiple, public and government projects. GRC has a no-limit contract license. The company’s profitability & leveraging is adequate, and has non-funded banking lines as well as supplier credit to facilitate its business. Equity base of company is strong. GRC has historically contracted only government sponsored projects thus it relies on awarding of public works (Federal & Provincial PSDP + CPEC). The control environment needs to be strengthened. The company has a defined strategy of building assets, required for its operations as well as investment purpose, through surplus cash. Debt is procured for the project financing, with reliance only on short term working capital excluding long term debt. GRC was originally focused on civil construction and irrigation works, but recently the firm is increasing its focus on hydel-power development. The company reported good profitability in FY20. The trend is expected to continue, indeed, improve. This is owing to the number and type of projects in hand. This has added to the equity book, which stands at a very comfortable level. GRC usually embarks upon large infrastructure projects in collaboration with different Chinese JV partners, which in their own right are established institutions.
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 subdued 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. The achievement and demonstration thereof would have further positive connotation for the ratings.
Ghulam Rasool & Co was incorporated as a private limited company in 1984. It was established by Mr Ghulam Rasool in 1970 and later inherited by his three sons and their respective families. The executive and operational roles are held by Mr. Majeedullah and Mr. Faisal Hassan who are the only board members and 'Active' shareholders. The main expertise of GRC historically has been in projects relevant to irrigation canals and river bridges, however the focus is now being moved on to hydel-power projects as well.
Scope of work comprises construction of roads, bridges, tunnels, canals and hydro-power stations etc. Significant projects to its credit are i) Kacchi canal KC-05, ii) An 84 MW hydro power plant underway in Kalam, Oshu River, iii) 12MW projects in Karora & Jabori, iv) Daral Khwar power plant, v) Pehure canal in KPK (recently contracted), vi) Earthquake memorial bridge, Muzafarabad & vii) Lowari tunnal, including international projects in Ethipia, U.A.E and Afghanistan.