PACRA Maintains Entity Ratings of Steelex (Pvt.) Limited

Steelex (Pvt.) Limited (“Steelex” or “the Company”) has been a key player in the piping industry for nearly four decades. The Company specializes in manufacturing and selling Mild Steel (MS) and Galvanized Iron (GI) pipes, produced in line with international quality standards. Over the years, Steelex has diversified its product range to include a comprehensive line of UPVC and CPVC pipes and fittings through its plastic division, catering to the water supply, sewerage, and building construction sectors. Operations are carried out through two manufacturing facilities located in Karachi, both equipped with state-of-the-art machinery and technology. The Company’s primary market remains the southern region of the Country, where it enjoys a strong foothold supported by consistent revenue growth. In addition, it has established a small but steady presence in export markets, supplying steel products to countries such as Singapore, Sri Lanka, the UAE, Iraq, Oman, Afghanistan, Trinidad, and several African nations. During FY24 and 6MFY25, capacity utilization remained strong, reflecting the Company’s stable operational performance. The steel segment, contributing approximately 56.6% of net revenues, continued to anchor the business by sustaining production volumes and serving as the primary driver of profitability due to its higher margin profile. Meanwhile, the PVC division has shown notable growth over the past year, with increased output and improved sales traction. This has added positively to the topline, reflecting growing demand in the water supply and construction sectors. However, despite this growth, the PVC segment’s contribution to overall margins remains relatively modest. Steelex maintains prudent financial management with minimal reliance on long-term debt. Working capital needs, driven by production volumes, are efficiently managed through a combination of internal cash flow and short-term bank financing. The financial risk profile is sound, with sufficient cash flows to cover interest obligations and moderate leverage. Moreover, the ratings also derive comfort from Steelex’s consistent growth trajectory and its ability to maintain a stable market position despite Pakistan’s challenging macroeconomic environment.
The ratings assigned to Steelex factor in the moderate business risk profile of the allied steel products sector, characterized by fragmentation, intense competition, and raw material price sensitivity linked to exchange rate fluctuations. As a family-owned and operated business, Steelex benefits from experienced sponsors whose continued support has been instrumental in navigating industry challenges; however, there is a need to enhance formal governance structures and organizational processes. Going forward, sustaining demand, maintaining customer loyalty, and implementing a sound credit policy will be critical. Strengthening management practices, governance, and the overall control environment remains a key area for improvement.

About the Entity
Steelex (Pvt.) Limited is a mid-sized manufacturing company offering high-quality steel and allied products in line with international standards for industrial, commercial, and residential applications. Established in 1985 by the late Chaudhry Muhammad Sabir, Steelex is now managed by his three sons—Mr. Zahid Ali, Mr. Shehzad Sabir, and Mr. Kashif Sabir—who serve on the board alongside their mother, Ms. Kausar Jabeen. The leadership is supported by a team of seasoned professionals who have been long associated with the Company.