The Pakistan Credit Rating Agency Limited
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Anam Waqas Ghayour

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PACRA Maintains Entity Ratings of Etimaad Engineering (Pvt.) Limited

Rating Type Entity
(24-Aug-23 )
(26-Aug-22 )
Action Maintain Upgrade
Long Term A- A-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The ratings demonstrate Etimaad’s strength, emanating mainly from its sustained operational history. Etimaad has delivered multiple, private infrastructure projects on standalone basis as well as in collaboration with different JV partners with completion spanned over a number of years. The pipeline is healthy; therein for the sake of sustainable long-term growth, management follows a balanced approach aiming to gain more share in different lines of businesses. The strength of the business is reflected in the clientele that the company has served and still continues to do business with, including some of the best and leading names of the business community. The entity is following a pyramid strategy; the top being mega projects (EPC), followed by construction and lastly maintenance related projects. Company follows a conservative approach on procurement of material while being involved in construction services. Hence hedging the fluctuation in raw material prices. Consequently, posting a limited topline. Overhead cost is being successfully covered with the re-occurring nature of O&M Contracts. The customer list portrays some of the best names in the domestic market. The Company has a track record of over a decade with strong capabilities in executing turnkey projects, as reflected in repeat orders from customers. The Company is adequately leveraged, undergone a conversion to Syndicated Financing, transitioning from Conventional Banking to Islamic Banking practices aligning with evolving market preferences and the organization's financial needs. The sponsors have demonstrated their commitment to operationally support the business by providing security and personal guarantees to obtain financial facilities.
The ratings are dependent on the sustainability of the business and its financial structure; sustaining a steady revenue stream and financial risk profile. Upcoming projects undertaken by management to streamline business for improved profitability are pivotal for considerable growth. Financial risk metrics need to be upheld. Meanwhile, strengthening of business development structure by inducting expert and experienced professionals is considered a key catalyst for upcoming projects.

About the Entity
Established by a team of professionals in May 2007, Etimaad is an integrated engineering and contracting company. The company is engaged in providing turnkey, retrofit and debottlenecking solutions for power/oil & gas sector, project management, general industrial construction (Civil, Mechanical, E&I), shut-down and turnaround services. Etimaad's two-member board is chaired by Mr. Mohammad Sohail Shafique, who holds 25.6% shareholding, is an Engineer with more than three decades of experience with renowned organizations. Mr. Mazharuddin Ansari family, holds 37.4% shareholding. Mr. Farooq Hussain Mughal, President & CEO, holds 26.9% shareholding and is supported by a qualified team. Grant Thornton Anjum Rehman, Chartered Accountants, is the external auditor of the company.

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.