PACRA Maintains Entity Ratings of Orient Rental Modaraba

Orient Rental Modaraba ("the Modaraba") is supported by an adequate and well-managed asset base, good asset quality, and a sustained trend in profitability. The Modaraba's primary business involves the rental and operations & maintenance (O&M) of gensets and other machinery. It gathers benefits from the association with Orient Energy Systems (Pvt.) Ltd. through its management company, Eman Management (Pvt.) Ltd., leveraging complementary business activities. The presence of seasoned industry veterans in management and the implementation of a robust internal control system remain crucial to its success. A significant portion of the Modaraba's revenue is generated from Ijarah Rentals, supplemented by O&M agreements. Gensets are predominantly installed in the textile and food & beverage sectors, while excavators are used at construction sites. O&M services primarily serve the healthcare, food & beverages, and textile industries. The Modaraba posts a sustained trend in its business and financial performance, providing comfort to the Modaraba's rating. During 9MFY25, the top-line improved by 20% to ~PKR 1,838mln, up from PKR 1,536mln in 9MFY24. Looking ahead, the Modaraba aims to enhance business volumes by exploring new rental avenues, including solar panel maintenance and battery energy storage systems, and increasing its focus on Diminishing Musharakah. To support its bottom line, attention to cost structures is required. From a financial risk perspective, the Modaraba's profile remains adequate, supported by manageable leverage. Sustained capacity utilization and a streamlined governance framework remain important for the Modaraba's ratings.
The ratings depend on the Modaraba's relative market position and its ability to sustain asset quality and profitability. Maintaining a sound financial profile is crucial, as any significant change to its risk profile could negatively affect the ratings.

About the Entity
Orient Rental Modaraba ('the Modaraba') became operational on 24-Nov-17 as a multi-purpose perpetual Modaraba. The Modaraba mainly operates in two segments: Ijarah Rentals (provides equipment rental solutions), along with Operations & Maintenance agreements. The Modaraba is (~25%) owned by its Directors, followed by the associated companies (~16.6%). Financial institutions hold ~8.9% stake; while the general public holds ~ 49.5% stake in the Modaraba. The Modaraba's Board is chaired by Mr. Chaudhry Jawaid Iqbal; while, Mr. Teizoon Kisat heads as the CEO. They are assisted by a team of seasoned professionals.