PACRA Maintains Entity Ratings of Orient Rental Modaraba

Orient Rental Modaraba ("the Modaraba") is supported by an adequate and well-managed asset base, sound asset quality, and a sustained trend in profitability. The Modaraba's core business comprises the rental and operations & maintenance (O&M) of gensets and other machinery. It benefits from its association with Orient Energy Systems (Pvt.) Ltd. through its management company, Eman Management (Pvt.) Ltd., leveraging complementary business activities and industry expertise. The presence of experienced management and a robust internal control framework further supports the Modaraba's operations. A significant portion of the Modaraba's revenue is derived from Ijarah Rentals, supplemented by O&M agreements. Gensets are primarily deployed across the textile and food & beverage sectors, while excavators are utilized at construction sites. O&M services cater mainly to the healthcare, food & beverage, and textile sectors. The broader NBFC sector remains relatively stable, with total assets reaching ~PKR 6,844bn as of 6MFY26, compared with ~PKR 6,204bn in 6MFY25. Mutual funds and plans continue to dominate the sector, representing ~66.3% of total assets, while discretionary/non-discretionary portfolios account for ~14.5%. Against this backdrop, the Modaraba's focus on asset-backed rentals and Shariah-compliant financing provides avenues to diversify its business mix. During 9MFY26, the Modaraba's topline remained broadly stable at ~PKR 1,843mln, compared with PKR 1,838mln in 9MFY25. Going forward, the Modaraba plans to build its business volumes through a combination of its core financing and rental businesses, while exploring opportunities in emerging segments. The Modaraba intends to increase its focus on Diminishing Musharakah financing and identify new rental opportunities, including solar panel maintenance and battery energy storage systems. In parallel, the Modaraba is placing greater emphasis on its Facilities Management segment, covering both hard and soft services, which has continued to witness growth. The Modaraba is also exploring opportunities in the electric mobility space, despite the challenges associated with the segment. In this regard, it is currently developing an electric bike offering, which is intended to be subsequently provided to corporate customers. These initiatives are expected to support diversification of the Modaraba’s revenue streams and provide avenues for business growth. Continued attention to cost optimization will remain important to support profitability. From a financial risk perspective, the Modaraba maintains an adequate profile, underpinned by manageable leverage. Sustaining healthy capacity utilization, diversifying revenue streams, and maintaining a streamlined governance framework will 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 ~8.85% stake; while the general public holds ~ 46.92% 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.