The Pakistan Credit Rating Agency Limited
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Kanwal Ejaz

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PACRA Assigns Initial Entity Ratings to H. Nizam Din & Sons (Pvt.) Ltd.

Rating Type Entity
(13-May-22 )
Action Initial
Long Term BBB+
Short Term A2
Outlook Stable
Rating Watch -

The rating reflects H. Nizam Din & Sons (Private) Limited’s (Nizam or “the Company”) reputable brand name, strong presence and long-established business history. Based upon the knowledge legacy and skills inherited from canvas tents/shelters manufacturing and exports, the Company was able to transform itself into a leading global supplier of humanitarian relief products i.e. Canvas/PVC tents, canvas fabric, relief blankets and etc. There are few local companies which are registered as approved vendors of United Nations and global donor agencies for relief items (tents/blankets) and Nizam is one of them. Relief business industry is correlated with needs & demands where predictability of orders creates challenges. Currently the demand for disaster relief and management has been rising due to global increase in natural disasters as well as regional conflicts. The growth of company’s revenues over the years also depicts increased demand for relief items such as tents and tarpaulin used to construct temporary structures that can function as field hospitals, testing locations and quarantine centers during global pandemic crisis. As the part of business diversification strategy, the Company has setup apparel exports business (denim jackets / bottoms) in Lahore, despite stiff competition this garments segment is gradually pacing up and contributes ~ 20% in total revenues. Going forward leadership of the Company intends to develop more sustainable and predictable business lines in future. The board of the Company is family oriented where sponsors are close family members and thus indicates room for improvement. For future stability of business sponsoring shareholders have well defined governing principals and constitution which they need to adhere. The Company is benefiting from sound systems of internal controls implemented across the organization. Financial profile of the Company is considered moderate with comfortable coverage and cash flows. Capital structure is leveraged and borrowings are mainly comprising of short-term borrowings for working capital management.
The ratings are dependent on sustainable growth in top-line and bottom-line with upheld margins, and market share while retaining sufficient cash flows and coverages. However, adherence to maintain its debt metrics at an adequate level is a prerequisite.

About the Entity
H. Nizam Din & Sons (Pvt.) Ltd. Company was incorporated as private Ltd Company, under the Companies Ordinance. 1984. The Company's registered office and a manufacturing unit situated at D/64 S.1.T.E. Karachi, whereas the other unit situated at 34km Ferozepur Road Lahore, Pakistan.
Company is majorly owned by Mr. Naveed Ahmad, its shareholding is divided between Mr. Naveed Ahmad (~72%), equal proportion of ~9% between Mr. Ali Ahmad, Mr. Usman Ahmad, and Mr. Saad Ahmad respectively. Mr. Ali Ahmad is the CEO and possess ample business experience.

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.