PACRA Maintains Entity Ratings of Ghulam Rasool & Company (Pvt.) Limited | Outlook Stable

Ghulam Rasool & Company (Pvt.) Limited (“GRC” or “the Company”) has maintained a prominent position in Pakistan’s construction industry for several decades. Established in 1970 by Mr. Ghulam Rasool, the business is now jointly owned by his three sons and their families, who also hold stakes in multiple other companies, enhancing the group’s overall financial strength. The functional and reporting responsibilities of the management team are demarcated; however, the control environment needs improvement. The Company has delivered multiple, public and government projects, and usually embarks upon large infrastructure projects in collaboration with different foreign JV partners, which in their own right are established institutions. It holds a no-limit contract license from the Engineering Council of Pakistan and specializes in civil construction, with a particular focus on irrigation systems and hydropower development. The Company follows a strategic approach of building assets, required for its operations as well as investment purposes, through surplus cash. The Company’s topline grew in FY25, reaching approximately PKR 18bln compared to PKR 12.4bln in FY24, supported by substantial progress on awarded multi-year contracts. However, profitability came under pressure, with gross margins declining to 10.2% from 20% and net profit falling to PKR 265mln from PKR 1,560mln, primarily due to cost overruns. Delays in the release of government funds further strained liquidity, leading to higher receivable days. To manage working capital, the Company extended its payables while maintaining mild leverage through a mix of funded and non-funded banking lines. Reliance on non-funded lines remains high relative to funded facilities, reflecting the sector’s inherent working capital requirements. The equity base stands at a modest PKR 16bln, supported by the sponsors’ extensive experience, particularly in the expanding hydropower sector. In view of declining margins and rising liquidity pressures, the previously assigned Positive Outlook has been revised to Stable. Nonetheless, the Outlook remains Stable as margins, though moderating, remain comfortable; the Company carries no sizeable debt; and the equity base continues to provide a sufficient financial cushion.
Going forward, the recovery and strengthening of profit margins and the timely release of funds will be key rating drivers, alongside the successful completion of ongoing contracts, award of anticipated projects, and reduced cost overruns. Initiatives to enhance governance, internal controls, and reporting—such as the implementation of an ERP system—are expected to further improve operational efficiency and support the rating outlook.

About the Entity
GRC was incorporated as a private limited company in 1984. The executive and operational roles are held by Mr. Majeedullah and Mr. Faisal Hassan, both key shareholders and the board members. Historically specializing in irrigation canals and river bridges, GRC is now expanding its focus to include hydropower projects. Its scope of work includes the construction of roads, bridges, tunnels, canals, and hydropower stations. Notable projects include the Kacchi Canal KC-05, an 84 MW hydropower plant in Kalam, 12 MW projects in Karora and Jabori, the Daral Khwar power plant, the Pehure Canal in KPK, the Earthquake Memorial Bridge in Muzaffarabad, and the Lowari Tunnel.