The Pakistan Credit Rating Agency Limited
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Anam Waqas Ghayour

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PACRA Maintain Entity Ratings of Techno Time Construction (Pvt.) Limited

Rating Type Entity
(31-Jan-23 )
(31-Jan-22 )
Action Maintain Initial
Long Term BBB BBB
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Techno Time Construction (Pvt.) Limited (TTC or the Company) holds experience in the construction industry of Pakistan for nearly a decade. TTC has delivered multiple, public and government projects of which the completion spanned a number of years. TTC also works on different infrastructure projects in collaboration with different JV partners. TTC was originally focused on roads and bridges construction, but recently the Company has also started focusing on housing societies development. During FY22, TTC is able to just sustain its topline in line with previous years and reported a revenue of PKR 5.1bln (FY21: PKR 5.7bln, FY 20: PKR 5.0bln). The company’s gross margins also remain range bound FY 22: 25.4% (FY21: 24.8%, FY 20: 27.3%), despite the increase in the overall cost of project completion due to inflationary pressure, and highly competitive bidding in large contracts. Liquidity in terms of cash flows remained suppressed due to limited funds from operations, though the working capital management remained strong. However, volatility associated with award of projects and hence, sustainability of revenues, cannot be overlooked as the business pipeline is not swelled up. The business funding needs are met by non-funded lines of banks and JV partner’s guarantees given on its behalf. Resultantly, it’s non-funded exposure is relatively less as significant support comes from leading JV partners in bearing non-funded exposure. The equity base of the Company is adequate, especially when compared with the non-funded obligations assumed by the Company.
The ratings remain exposed to TTC’s presence in the cyclic sector owing to political instability, and a volatile economic environment. The ratings will remain dependent on upholding financial metrics involving the timely completion of key commercial projects without any significant cost and time overruns. In addition, sustaining the topline with collection efficiency will remain imperative. Improvement in governance is also important and needs to be strengthened.

About the Entity
Techno Time Construction (Pvt.) Limited was established by Mr. Atta Ullah Khan as a partnership firm in 2012 which got converted into a private limited company later in 2017. The executive and operational roles are held by Mr. Atta Ullah Khan, Mr. Zaka Ullah Khan and Mr. Samee Ullah Khan who are also the board members and shareholders. M/s. Clarkson Hyde Saud Ansari Chartered Accountants, are the external auditors of the Company. The auditors expressed an unqualified audit opinion on the financial statements of TTC for the year ended June 30, 2022. Scope of work comprises mainly construction of highways, Bridges and Interchanges. TTC has also recently ventured into the development of housing societies. Significant projects to its credit include Construction of Interchanges at Khana & Sohan for PKR 2.187 billion and at Kharal for PKR 1.695 billion on Expressway Islamabad.

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.