The Pakistan Credit Rating Agency Limited
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Sohail Ahmed Qureshi

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PACRA Upgrades Entity Rating of H. Nizam Din & Sons (Pvt.) Ltd.

Rating Type Entity
(13-May-23 )
(13-May-22 )
Action Upgrade Initial
Long Term A- BBB+
Short Term A2 A2
Outlook Stable 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. The company owns a modern and state-of-the-art plant & machinery, and processes are vertically integrated thus contributing towards cost control and operational efficiencies. There are a few local companies that 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 associated with the climate change and ongoing regional conflicts i.e., Russia – Ukraine war. During the period under review, the local devastating flood also created a huge demand for relief items. The resources of the company were aligned to serve the demand amicably. Considering the fact topline of the company depicted a massive growth in local sales, on the other side export demand is also following a rising trend as depicted by future financial projections of the company which is a good sign. The product slate of the company is well diversified between relief and non-relief products which provide resilience in revenue streams. 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 principles and constitutions to which they need to adhere. The operations of the companies are governed by a qualified team of professionals, and a sound system of internal controls is implemented across the organization. Financial profile of the Company is considered good with comfortable coverage, cash flows, and working capital cycle. Capital structure is leveraged and borrowings are mainly comprised 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 maintaining 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.