The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Noor Ul Haq

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PACRA Maintains Entity Ratings of Zahir Khan & Brothers.

Rating Type Entity
(30-Aug-19 )
(01-Mar-19 )
Action Maintain Initial
Long Term A A
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The ratings reflect the strength of the Zahir Khan & Brothers' (ZKB) business model. ZKB embarks upon large infrastructure projects in collaboration with different JV partners, which in their own right are established institutions, hailing from different countries. Over the years, ZKB has undertaken huge projects, of which the completion spanned a number of years. Some of the projects are in process - providing projected revenues in the coming years as well. The pipeline is getting dry due to slowdown in the infrastructure related projects though ZKB is hopeful of getting some new projects. The company booked high profits in FY18; the recent profitability, on a comparative scale is on the lower side, yet remains healthy.
ZKB is led by Zahir Khan and family - a name well known in the construction industry. They have built expertise in the business and worked out oversight mechanism to manage various risks prevalent in this business. The business has funding needs. This is primarily met by non-funded lines of banks and supplier credit. Equity base is strong and is mostly represented by a portfolio of investment property.
The ratings are dependent on the sustainability of the business and financial structure of ZKB. Governance and corporate structure requires upgradation and improvement and so does the financial transparency. Financial metrics need to be upheld as well. Any prolonged downturn in subdued business volume can have a detrimental effect on the rating. The management has an express mandate to corporatise its structure, while improving the reporting of its financial performance on quarterly and annual basis.

About the Entity
Zahir Khan & Brothers is established in 1970. ZKB, as an industry leader in construction, currently nurtures projects that span across such diverse segments of construction industry, all of which impact the nation of Pakistan, and the progress of its people. With over 152 projects, ZKB’s portfolio has covered the entire spectrum of construction work in every corner of Pakistan.
ZKB is registered as a Partnership firm and owned by 4 Partners. Mr Zahir Khan, the key founder and CEO of ZKB, with deep hands-on knowledge, has extensive construction industry experience of over 36 years owns 51%, Mr Mohabbat Khan owns 41%, Mr Suleman and Mr Samiullah hold 4% each respectively.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.