The Pakistan Credit Rating Agency Limited
Press Release


Behrooz Fareed

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PACRA Maintains Entity Ratings of Sitara Petroleum Service (Pvt) Limited

Rating Type Entity
(11-May-22 )
(19-May-21 )
Action Maintain Maintain
Long Term A- A-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The Ratings reflect the sound business profile of Sitara Petroleum Service (Pvt) Ltd. ('Sitara Petroleum' or 'the Company') in line with current dynamics of petroleum industry. Sponsors of the Company are in the business for over three decades, reflecting their business acumen. The Company has exhibited improvement in margins on the back of high petroleum prices , lower operational costs and reduced financial costs. The financial risk profile is characterized by adequate leveraged capital structure. The equity has been boosted through profits. The Company has investment in real estate which supplement risk absorption capacity. The sponsors are engaged in real estate projects as well. The Company derives strategic impetus from its business ties with Gas & Oil Pakistan.
The ratings are dependent on the management's facility to sustain its business volumes while holding the margins. Sustaining the business and financial profile along with improvement in the governance framework would be vital for the ratings. Meanwhile, financial transparency is considered paramount.

About the Entity
Sitara Petroleum Service (Pvt.) Limited (SPSL) was incorporated in July 2012. The Company is 94% owned by Mr. Tahir Iqbal, 4% by Mr. Muhammad Ali, while Mr. Muhammad Javed and Mr. Muhammad Hassan Javed own 1% each. The BOD comprises of seven members including two independent and three non-executive directors. Mr Tahir Iqbal is the CEO and he is ably supported by a team of experienced professionals. SPSL is mainly engaged in trading and distribution of Diesel, Petrol, and Lubricants. The Company is also providing fleet logistic services to OMCs in the country namely GO, PSO and Total PARCO. The Company is currently operating 42 fuel stations (39 GO petroleum, 2 PSO & 1 Total). The Company has petroleum storage capacity of 4.5 million liters and has carriage fleet of around 300 oil tankers. The registered office of the Company is situated at 14-T Gulberg-II, Lahore.

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.