PACRA Maintains Entity Ratings of Awan Trading Company (Pvt.) Limited

Awan Trading Company (Pvt.) Limited (“the Company” or “Awan Trading”) strengthens its position as a leading supplier of imported coal to Pakistan’s key industries, leveraging long-standing partnerships with global suppliers from Indonesia, South Africa, and the United States. These strategic alliances ensure a reliable supply chain, operational resilience, and the consistent delivery of coal to meet the evolving needs of its customers. After two years of decline in coal demand, driven by an abnormal surge in international prices to over USD 400 per ton, the market has now witnessed a recovery, with prices stabilizing in the USD 90–110 per ton range. This normalization has spurred a preference for imported coal over local alternatives, boosting domestic demand. Pakistan’s total coal imports rose to 4.4mln metric tons in the 9MFY25, compared to 3.4mln metric tons in the SPLY, with Awan Trading importing 1.85mln metric tons of non-Afghan coal during the period. Supported by this demand recovery, along with lower interest rates and higher public sector development spending, Awan Trading’s net revenues grew by 16.1% to PKR 58.2bln in the first ten months of FY25, aided by effective inventory management at its warehouses. While higher volumes supported top-line growth, gross and net profit margins experienced some compression due to lower selling prices following the global coal price correction. Nevertheless, Awan Trading preserved margin resilience by passing currency fluctuation impacts to customers and reinforcing liquidity through strategic deployment of surplus funds. Short-term investments rose to PKR 1,062mln in April 2025 (March 2024: PKR 882mln), while long-term investments remained stable at PKR 199.939mln (March 2024: PKR 199.920mln), ensuring a strong balance sheet and financial flexibility. Furthermore, the Company faces a concentration risk, with the majority of its sales concentrated in a single sector, Independent Power Producers, and 69% of total sales attributable to one buyer within that sector. Additionally, in recent years, Pakistan’s coal consumption patterns shifted towards local sources amid a severe supply and price crisis, during which multiple alternatives were explored and successfully implemented. However, as global prices corrected and coal volumes began to rebound, Awan Trading, recognizing the inherent risk of over-reliance on a single commodity, initiated a strategic diversification plan. This strategy includes transitioning from a pure coal trading model to a broader commodity trading platform, enabling the Company to capture new opportunities and ensure sustainable, long-term growth.
The Company has demonstrated consistent sales growth over the years while maintaining a strong financial profile, supported by the absence of long-term borrowings and prudent use of short-term facilities primarily for working capital requirements. It has successfully navigated recent challenges, sustaining operations and financial stability. The rebound in imported coal demand during FY25, driven by lower global prices and favorable exchange rates, has been a positive development. Going forward, the Company’s ability to sustain and enhance margins and revenue growth, together with continued improvement in its governance structure, and successful execution of its diversification strategy to mitigate concentration risk, will remain key considerations for maintaining the current rating.

About the Entity
Established in October 1992, Awan Trading Company (Pvt.) Limited is among Pakistan’s leading importers and traders of high-quality coal. While initially dormant until 2002, the Company has since developed a strong market presence through strategic infrastructure investments and partnerships with global suppliers. Headquartered in Karachi, Awan Trading maintains stockpiles at Port Qasim, PIBTL (Sindh), Taxila, and Chicho Ki Maliyan (Punjab), ensuring reliable and timely nationwide supply. The Company is owned by two families, with the Tekwani family holding a 74.26% stake and the Awan family a 25.74% stake. It is led by Chief Executive Mr. Govind Ram, associated with the Company since its inception, and supported by a long-serving management team and a four-member Board of Directors.