PACRA Maintains Entity Ratings of Descon Engineering Limited

Descon Engineering Limited ("Descon" or "the Company") stands as one of Pakistan's foremost engineering enterprises, with extensive expertise across key sectors such as Oil & Gas, Cement, Power, Hydro Power, and Renewable Energy. The Company specializes in Engineering, Procurement, and Construction (EPC), Infrastructure, Construction, Manufacturing, in addition to maintenance services and automation. As part of the Descon Group of Companies (“the Group”), Descon Engineering benefits from over four decades of industry experience and a diverse presence across multiple sectors of the economy. In addition to its operations in Pakistan, the Group has expanded its footprint internationally, particularly in the Middle East and South Africa, where it offers the same range of services as Descon does domestically. The Company’s consolidated profitability is strong, reinforcing its financial stability. The Group maintains a strategic liquid reserve, providing a safeguard against unforeseen risks. With a solid track record of sustaining business operations, Descon’s project portfolio remains healthy, including a significant undertaking in the Hydro Power sector. Due to the built-in escalation clauses in its contracts, which protect against inflation and currency depreciation, the Company achieved approximately 27% revenue growth in FY24, despite facing challenging economic conditions. This growth was further bolstered by a net profit of PKR 946 million in FY24, marking a significant recovery from a loss of PKR 55 million in FY23. Ratings take comfort from the fact that the Company has considerable projects in the pipeline which ensures sustainability of the business. While Descon’s large-scale projects do not require significant capital funding, non-funded obligations remain central to its operations. As such, effective working capital management is a key priority, and the management team has demonstrated expertise in this area. Descon’s strength lies in its ability to secure future contracts and maintain a healthy project pipeline. The business is managed by a skilled and independent team, and despite its unlisted status, the Company maintains rigorous governance practices and a dynamic control environment.
The Company's ratings are reliant upon the timely completion of ongoing projects, which are critical for streamlining business operations and enhancing profitability. Additionally, the successful undertaking of new projects is equally important. Both factors are essential for sustaining growth and ensuring long-term success.

About the Entity
Descon Engineering Limited was established as a private limited company in Pakistan on December 15, 1977, and transitioned to an unquoted public company on November 29, 1997. The majority of the Company's shares, 99.9%, are held by DEL Projects (Private) Limited. Founded by Mr. Abdul Razzak Dawood, a visionary entrepreneur and former CEO of Descon, the Company was built with a strong commitment to creating a lasting institute in the engineering sector. Mr. Dawood's successors, Mr. Taimur Dawood and Mr. Faisal Dawood, continue to uphold this vision, serving on the Company's board as Chairman and Vice Chairman, respectively. The leadership team at Descon is comprised of highly skilled professionals with decades of industry experience. The CEO, Mr. Taimur Saeed, brings over 30 years of expertise to the Company, driving its strategic direction and growth.