Jamal Pipe Industries (Pvt.) Limited

CREDIT RATING REPORT | Jun-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
19-Jun-25 BBB A2 Positive Maintain -
03-Jul-24 BBB A2 Stable Maintain -
03-Jul-23 BBB A2 Stable Maintain -
15-Jul-22 BBB A2 Stable Maintain -
16-Jul-21 BBB A2 Stable Maintain -
About the Entity

Jamal Pipe Industries (Pvt.) Limited was incorporated in 1981 and is wholly owned by the sponsoring family, with equal shareholding held by the Mian brothers — Mr. Mian Farooq Ahmed and Mr. Mian Shakeel Ahmed. The Company is overseen by a two-member Board of Directors, with Mr. Farooq Ahmed serving as Chief Executive and Mr. Shakeel Ahmed as Executive Director. Both directors possess the requisite technical expertise to effectively manage and oversee operations. Mr. Zubair Ahmed, a Chartered Accountancy finalist, serves as the Chief Financial Officer and has a long-standing association with the Company.

Rating Rationale

Jamal Pipe Industries (Pvt.) Limited ("JPI" or "the Company"), a family-operated business with over four decades of operational history, is engaged in the manufacturing of pipes and allied products. The Company’s product portfolio is well-diversified and includes black line pipes, galvanized line pipes, various types of poles (such as octagonal, tubular, and street light poles), and guardrails. A significant portion of the revenue is derived from pipes and guardrails, while the remainder comes from the pole segment, which also includes a small contribution from galvanized iron pipes. The Company’s product diversification is considered a positive aspect. Increasing revenue contributions from each segment would further reduce concentration risk and strengthen the overall business risk profile. The steel pipes and tubes industry remains vulnerable to broader macroeconomic factors such as exchange rate volatility, prices of international raw materials largely imported, and financing costs. Despite these sector-wide challenges, JPI’s performance during the period under review has been notably positive. Although the industry has seen volumetric pressure due to economic slowdown, JPI has managed to maintain a healthy order book, supported by strong relationships with key corporate clients.
In 6MFY25, JPI recorded sales revenue of approximately PKR 2,052 million, compared to PKR 1,596 million in the same period last year, reflecting a growth of around 29%. Gross profit margin improved to 10.7% from 9.9% in 6MFY24, while operating margin rose to 7.7% from 6.2%, and net profit margin increased to 4.4% from 3.1% over the same period. The growth in profitability was largely attributed to the easing of import restrictions, which enabled the Company to resume importing raw materials at better prices, reducing input costs compared to earlier local procurement. On the financial side, JPI maintains a conservative capital structure with no long-term borrowings, relying entirely on short-term financing to support its working capital needs. As of 6MFY25, the Company’s leverage stood at 22.4%, compared to 29.7% in 6MFY24 and 6.5% in FY24. EBITDA to finance cost coverage also improved, standing at 9.5x in 6MFY25 versus 7.5x in 6MFY24, reflecting stronger earnings and better cost management. Sufficient unutilized working capital lines provide further financial cushion.
Given the improved profitability, enhanced operational efficiency, and disciplined financial management, the Company's outlook has been revised to “Positive,” highlighting confidence in JPI’s continued performance and stability going forward.

Key Rating Drivers

The ratings reflect JPI’s adequate market presence within a highly fragmented industry. The Company follows a clear policy of maintaining a debt-free long-term capital structure, with its borrowings comprising solely of short-term financing to support working capital requirements.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Jamal Pipe Industries (Pvt.) Limited

rating analysis

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Profile
Legal Structure

Jamal Pipe Industries (Pvt.) Limited (also known as "JPI" or "the Company"), a private limited company incorporated in 1981, has been engaged in the manufacturing of pipes and allied products. The Company’s product portfolio includes steel tubular poles, steel octagonal conical poles, steel round conical poles, and guardrails.


Background

Jamal Pipe Industries (Pvt.) Limited has been present in the steel sector for over four decades. The head office is located in Lahore. The manufacturing facility is located at Kala Shah Kaku, Main GT Road.


Operations

The Company commenced its operations in 1981. The Company is primarily engaged in the manufacturing and sale of steel tubular poles, steel octagonal conical poles, steel round conical poles, and guardrails, which are used in different government and private projects. Key clients include K-Electric, PTCL Lahore, PTCL Islamabad, PMU Swat, DHA, and FESCON DHA, reflecting a strong institutional customer base across the utility and construction sectors.


Ownership
Ownership Structure

JPI's ownership structure comprises shareholding by two individuals of the Ahmed Family. JPI's ownership structure is vested in two brothers. An equal stake of 50% is owned by each, i.e., Mr. Mian Farooq Ahmed and Mr. Mian Shakeel Ahmed.


Stability

The group has three companies under its umbrella, including Jamal PVC Pipes, Jamal Seamless Pipes, and Jamal Pipe Industries (Pvt.) Limited. The structure is vested in two family members. Both Mr. Farooq and Mr. Shakeel have 33% stake in Jamal PVC Pipes and Jamal Seamless Pipes, respectively, which bodes well for the stability in the structure.


Business Acumen

The late Mr. Jamal, the founding member, established the business along with his two sons, Mian Farooq Ahmed and Mian Shakeel Ahmed, following their experience in the steel trading sector. The Mian brothers bring valuable expertise in successfully managing the steel pipe business. Their commitment to the business is reflected in the management’s consistent and focused approach. As a result, the sponsors’ business acumen is considered strong.


Financial Strength

The sponsors' sole business interest lies in the steel sector, and they have consistently demonstrated their commitment to the Company by injecting funds as and when needed. Furthermore, their willingness to provide financial support, if required, is considered strong.


Governance
Board Structure

The overall control of the Board rests with a two-member Board of Directors, both of whom belong to the sponsoring family, including the Chief Executive Officer. Mr. Salman Azim also serves on the Board in the capacity of Financial Advisor. Mr. Farooq Ahmed, the Chief Executive Officer, brings substantial value to the Board through his extensive experience and long-standing association with the industry, spanning over four decades.


Members’ Profile

Board members are equipped with the necessary technical skills and adequate industry knowledge. Mr. Farooq Ahmed is the CEO of the Company. He has hands-on experience in the planning, set-up, erection, deployment & operational exposure in the steel industry.


Board Effectiveness

BoD meetings are regularly conducted with the CEO and directors. As the board structure is still developing, there are no board committees in place. The Internal Audit function is also not available.


Financial Transparency

The Company has transitioned from a non-QCR rated auditor to a QCR-rated audit firm. Shahbaz Hannan & CO. served as the Company’s external auditors and issued an unqualified opinion on the Company’s financial statements for FY24, reaffirming the integrity and accuracy of the financial reporting process.


Management
Organizational Structure

JPI operates under a streamlined organizational setup led by Mr. Farooq Ahmed, the Chief Executive Officer. He is supported by a team of experienced professionals with the necessary technical expertise. The Company follows a functional reporting framework where departmental staff report to their respective department heads. These heads, in turn, report directly to the Chief Financial Officer, Mr. Zubair Ahmed, and Factory Manager, Mr. Rehan Saeed. The organizational hierarchy promotes clear lines of responsibility and operational efficiency.


Management Team

Mr. Farooq Ahmed is the Chief Executive Officer of the Company. Mr. Zubair Ahmed –(CA finalist) is the CFO of the Company. Mr. Farooq Ahmed-CEO, is supported by a team of experienced individuals who are equipped with the necessary technical skills.


Effectiveness

The overall governance structure of the Company remains limited, with board control resting with two members, both from the sponsoring family. While Mr. Farooq Ahmed brings extensive industry experience spanning over four decades, the board currently operates without any formal committees. The absence of board-level committees limits the depth of oversight, although day-to-day management is actively handled by a technically qualified team reporting to key executives. The effectiveness of operations is supported by hands-on involvement of senior management and long-standing institutional knowledge.


MIS

The Management Information System (MIS) of Jamal Pipe Industries (Pvt.) Limited is developed using Visual Basic and is tailored to the Company’s specific operational and product needs. The system facilitates the recording of financial transactions through customized input forms, including bank and cash payment and receipt vouchers, as well as sales and purchase modules. The MIS is adequately equipped to generate timely and relevant reports that support both operational monitoring and strategic financial decision-making.


Control Environment

The Company’s core business operations are managed through an Oracle-based ERP system, implemented five years ago to streamline processes and enhance management reporting. The system integrates key departments, including Production, Sales, Stores, Inventory, Accounts & Finance, and Imports. It is user-friendly, requires minimal maintenance, and is equipped with appropriate security features to ensure data integrity and protection.


Business Risk
Industry Dynamics

In FY24, the steel sector faced significant challenges due to a slowdown in economic activity, higher inflation, and elevated energy and policy rates. These difficulties have particularly affected several notable players in the long steel sector. During FY24, local steel production was reported at approximately 8.4 million metric tons, reflecting a YoY decline of about 5.6%. Production of billets and ingots (long steel) decreased by 7.5% to around 4.9 million metric tons, while production of coils and plates (flat steel) fell by 2.7% to approximately 3.5 million metric tons. However, going forward, the visible reduction in policy rates, the easing of import restrictions, and improved spending on development projects are expected to enhance demand dynamics in the steel sector.


Relative Position

Jamal Pipe Industries has an annual production capacity of over 30,000 MT of steel pipes, positioning it among the medium-sized players in the industry. The Company’s major projects include those with K-Electric, DHA, PTCL, and various government infrastructure initiatives. Its steel pipes are primarily used in water supply, Sui gas distribution, pressure lines, and chemical flow systems. Poles serve as components in street lighting and transmission networks, while guardrails are deployed for road safety applications.


Revenues

During 6MFY25, the Company reported a significant revenue growth of 38%, reaching PKR 2,205 million compared to PKR 1,596 million in the same period last year (FY24: PKR 2,586 million). This notable increase in top-line performance was primarily driven by the commencement of the PMU – Matta Swat project in KPK.


Margins

During 6MFY25, the Company’s operating and net margins improved to 7.7% and 4.4%, respectively, compared to 6.2% and 3.1% in 6MFY24 (FY24: 7.0% and 3.4%). This margin stability also reflects a consistent pricing environment for the Company’s products during the period.


Sustainability

The Company maintains strong affiliations with key institutional clients such as K-Electric, DHA, PTCL, and various government infrastructure projects, which provide consistent business support. However, the continuity of these relationships remains critical going forward. Limited customer base diversification continues to be a key concern, and expanding the client portfolio would enhance business sustainability and reduce concentration risk.


Financial Risk
Working capital

JPI typically manages its working capital by extending payments to creditors. In the past, due to import restrictions, JPI sourced raw materials from local suppliers on extended credit terms. However, the Company has now resumed the import of raw materials, and as of December 2024, approximately 92% of the raw material was imported, with the remaining sourced locally. During 6MFY25, JPI’s net cash cycle (a function of inventory, receivables, and payables) stood at 58 days, compared to 48 days during the same period last year (6MFY24) and 60 days for the full year FY24. The increase in the cash cycle was primarily driven by a decline in trade payables days, which reduced to 86 days in 6MFY25 from 118 days in 6MFY24 and 144 days in FY24. Short-term borrowings increased to PKR 269 million in 6MFY25, compared to PKR 343 million in 6MFY24 and PKR 59 million in FY24. This increase in borrowings, coupled with the reduction in payables days, reflects the Company’s payments for imported raw materials during this period.


Coverages

During 6MFY25, FCFOs stood at PKR 103mln (6MFY24: 68mln, FY24: PKR 162mln). However, the EBITDA to finance cost coverage improved to 9.5x in 6MFY25, compared to 7.5x in 6MFY24 and 4.4x in FY24.


Capitalization

JPI's capital structure comprises equity and short-term borrowings. As of 6MFY25, the Company’s leverage increased, with the debt-to-capital ratio recorded at approximately 22.4%, compared to 29.7% in 6MFY24 and 6.5% at the end of FY24. It is important to note that the Company's borrowings consist entirely of short-term debt, aligned with its working capital requirements.
 
 

Jun-25

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Jamal Pipe Industries (Pvt.) Limited

financial summary

(PKR mln)

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Dec-24
6M		 Jun-24
12M		 Jun-23
12M		 Jun-22
12M
A. BALANCE SHEET
1. Non-Current Assets 636 647 566 602
2. Investments 0 0 0 0
3. Related Party Exposure 0 0 0 0
4. Current Assets 2,056 1,634 1,735 1,715
a. Inventories 1,459 1,120 1,074 740
b. Trade Receivables 339 305 395 694
5. Total Assets 2,692 2,281 2,301 2,317
6. Current Liabilities 1,493 1,382 1,462 1,539
a. Trade Payables 980 949 1,097 1,039
7. Borrowings 269 59 86 143
8. Related Party Exposure 0 0 0 0
9. Non-Current Liabilities 0 0 0 0
10. Net Assets 931 840 752 635
11. Shareholders' Equity 931 840 753 635
B. INCOME STATEMENT
1. Sales 2,052 2,586 2,507 3,097
a. Cost of Good Sold (1,833) (2,294) (2,249) (2,834)
2. Gross Profit 219 293 258 263
a. Operating Expenses (60) (112) (103) (97)
3. Operating Profit 159 180 155 166
a. Non Operating Income or (Expense) 0 (7) (5) (8)
4. Profit or (Loss) before Interest and Tax 159 174 150 158
a. Total Finance Cost (32) (50) (40) (49)
b. Taxation (37) (36) (32) (39)
6. Net Income Or (Loss) 90 88 78 71
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 103 162 124 165
b. Net Cash from Operating Activities before Working Capital Changes 81 114 84 110
c. Changes in Working Capital (300) 26 (45) 345
1. Net Cash provided by Operating Activities (220) 140 39 455
2. Net Cash (Used in) or Available From Investing Activities (2) (115) 6 (38)
3. Net Cash (Used in) or Available From Financing Activities 210 (34) (56) (398)
4. Net Cash generated or (Used) during the period (11) (8) (12) 19
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 58.7% 3.2% -19.1% 13.9%
b. Gross Profit Margin 10.7% 11.3% 10.3% 8.5%
c. Net Profit Margin 4.4% 3.4% 3.1% 2.3%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) -9.6% 7.3% 3.2% 16.5%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 20.4% 11.0% 11.3% 11.8%
2. Working Capital Management
a. Gross Working Capital (Average Days) 143 204 211 163
b. Net Working Capital (Average Days) 58 60 56 66
c. Current Ratio (Current Assets / Current Liabilities) 1.4 1.2 1.2 1.1
3. Coverages
a. EBITDA / Finance Cost 9.5 4.4 4.8 4.8
b. FCFO / Finance Cost+CMLTB+Excess STB 4.6 3.0 3.3 3.7
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.1 0.2 0.0 0.0
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 22.4% 6.5% 10.3% 18.3%
b. Interest or Markup Payable (Days) 0.0 0.0 0.0 0.0
c. Entity Average Borrowing Rate 16.7% 29.5% 33.1% 13.7%

Jun-25

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Jamal Pipe Industries (Pvt.) Limited

rating scale

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Jun-25

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Jamal Pipe Industries (Pvt.) Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
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    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
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Jun-25

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