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PACRA Maintains Entity Ratings of Ziauddin University

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

Ziauddin University (‘the University’) was established in 1995 as a medical university. Over time the University has evolved and, currently, has substantial presence in the academic disciplines of Health Sciences, Law, Politics & Governance, Pharmacy, Engineering, Science, Technology & Management, Eastern Medicine & Natural Sciences, Liberal Arts & Human Sciences, Nursing & Midwifery and Veterinary & Animal Sciences. The University has also diversified by introducing sizable program offerings, enrollment, and faculty. Expansionary measures coupled with literacy driven populace has helped the University grow, resulting in various locations across Karachi and recent expansion in Sukkur. The University has also installed nuclear radioactive device with the approval of the Government for purposes of teaching nuclear studies. The education sector has shown noticeable competition, however, the University has maintained an adequate position. The University enjoys an adequate risk profile and continues to increase its revenues driven by capacity enhancement along with miniscule increase in the fee. The introduction of new programs and campus to accommodate additional students may soar up the revenue stream. This will be further benefitted once Sukkar campus becomes fully operational. The University has managed to generate adequate margins and primarily funds expansionary plans through debt. However, the management remains confident in the University's ability to generate surplus for repayment and to fulfill cash requirement for future expansions. The ratings draw strength from the University’s adequate financial profile represented by moderately leveraged capital structure and coverages. While, the working capital cycle remains adequate. The University also owns substantial land. On the qualitative front, an association of the Board of Governors with the University ensures a stable governance framework. Moreover, the University has an array of national accreditations and international linkages supplementing its ranking.
The ratings are dependent upon the management’s ability to sustain margins while remaining self-sufficient and in surplus for expansionary measures. Sound financial discipline remains critical. Prudent management of the working capital, maintaining sufficient cash flows, and coverages remain crucial for the ratings. Any deterioration in coverages and margins leading to higher financial risk or substantial losses will adversely impact ratings. Management of reputational risk is also important for ratings. Successful and timely materialization of expansionary plans remains imperative for the ratings.

About the Entity
Ziauddin University (‘the University’) was established through ACT VI of 1995 (Ziauddin Medical University ACT) by the Provincial Assembly of the Government of Sindh. The University is a non-profit private institution which provides higher education services. It is accredited and recognized by the Higher Education Commission of Pakistan (HEC). The University has its branch campuses in Karachi and Sukkur. The Board of Governors (BoG) includes representatives from Dr. Ziauddin Hospitals Trust, Government and Regulatory Bodies. Mr. Asim Hussain serves as Chairman of the BoG and Chancellor of the University.

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.