PACRA Maintains the Entity Ratings of Matracon Pakistan (Pvt.) Limited

Matracon Pakistan (Pvt.) Limited (“the Company” or “Matracon”) has been in operation since 1996 and is a well-established name in the construction industry. It has successfully delivered numerous public and private sector projects since its inception. The Company undertakes large-scale infrastructure projects in collaboration with various local and international joint venture partners, including reputed Chinese and Turkish firms. Initially focused on road construction and drainage systems, Matracon has recently expanded its portfolio to include building design and construction. In recent years, the Company has been awarded a significant number of multi-year projects that are currently under execution, with some other projects also in the pipeline, ensuring steady revenue visibility for the coming years. During FY25, the Company reported a topline of PKR 20.46bln (FY24: PKR 14.41bln, FY23: PKR 10.5bln, FY22: PKR 14.4bln), with gross margins improving to 16.1% (FY24: 11.5%, FY23: 9.3%, FY22: 11.6%), following a similar positive trend in net margins. The improvement in financial performance, coupled with a robust project pipeline and strong business prospects, underpins the assignment of a positive outlook on the rating. As the income stream is tender-based, revenues remain dependent on the Company’s bidding success, while working capital requirements vary with project execution, where performance guarantees remain critical. The Company’s leveraging indicators are adequate, with reliance primarily on non-funded banking lines.
The Ratings are dependent on the sustainability of the business and its financial structure, including the ability to maintain a steady revenue stream and ensure timely completion of projects without significant cost or time overruns. Timely allocation of funds and efficient collection, as projected, will remain crucial to the Ratings. Sustainable growth in financial performance, timely completion of the FY25 audit, and continued improvement in governance, particularly through a strengthened board structure, will be key considerations that may support convergence toward an upward revision in the rating.

About the Entity
Matracon Pakistan (Pvt) Ltd. was established by Mr. Abdul Qadir in 1996 and later on converted into private limited company in 2006. The director roles are held by Mr. Abdul Qadir and Mr. M. Ayub who are the only board members and 'Active' shareholders. Mr. Jehanzeb Saulat continues to serve as the Chief Executive Officer of Matracon Pakistan (Private) Limited. For the fiscal year ended June 30, 2024, Hassan Farooq & Co. provided an unqualified audit opinion on the Company's financial statements. Scope of work comprises construction of roads, bridges, tunnels, canals and drainage systems. Significant projects to its credit include several large-scale construction works, with a substantial portion successfully completed and the remainder comprising ongoing projects being executed with various Government and semi-Government departments.