The Pakistan Credit Rating Agency Limited
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Uswa Sikandar

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PACRA Maintains Entity Ratings of Maaksons Engineering Corporation Limited

Rating Type Entity
(23-Aug-23 )
(24-Aug-22 )
Action Maintain Maintain
Long Term BBB+ BBB+
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Maaksons Engineering Corporation Limited (“Maaksons” or “the company”) has been in the construction industry for many decades. The company has three generations of the sponsoring family in the business and has two main offices – Lahore and Islamabad. The sponsors have a very good understanding of the business. The reporting and functional responsibilities are clearly demarcated. Maaksons has a no limit contract license. The Company has a track record with strong capabilities in executing turnkey projects and has built a portfolio of properties at diverse locations. A few years ago, Maaksons re – strategized its business model towards real estate development to ensure revenue’s sustainability and diversification. However, the redefined strategy could not be sustained for long owing to immensely volatile macroeconomic indicators and the company has once again resorted to its forte of construction of roads and highways. Due to these frequent shifts in the business model, the company’s topline remained erratic over the years , however, in FY23 it surged multiple times and was recorded at PKR 4.07 billion (Management Numbers), due to inflows from recently awarded construction projects. Comfort can be drawn from the sponsors' experience and vision to preempt business strategy according to the changing landscape. Company's ability to demonstrate sustainable and continual growth in the revenues as well as profitability through being awarded sizeable number of projects remains critical to the ratings. The company has limited financial exposure and is mildly leveraged, with a mix of funded and non-funded banking lines to facilitate its business.
The ratings incorporate inherent synergies and diversification in the group structure providing implicit strength to the business model. Going forward completion of existing contracts on time, successful bidding for new ones and devising a strategy to build sustainable revenue stream remains pivotal for considerable growth. Good corporate governance practice is considered essential.

About the Entity
Maaksons Engineering Corporation Limited, initially named as M. A Aleem Khan & Sons, was officially registered as a Company in 1984 but has been in business since 1951. Maaksons
scope of work comprises construction of roads and highways, bridges and structures, residential and commercial buildings, canals and tunnels, etc. Significant projects to the company’s credit are Signal Free Corridor Islamabad Highway and in DHA Lahore, Metro Lahore, 29 storey Telecom Tower Islamabad, Gulberg Green, 3x210 Thermal Power Station Muzaffargarh, Chashma Canal, etc. to name a few. BOD comprises six members, all of whom belong to the sponsoring family. Company’s ownership is also collectively divided among members of the sponsoring family.

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.