PACRA Upgrades Entity Ratings of Allah Tawaqal Metals (Pvt.) Limited
Founded in September 2019, Allah Tawaqal Metals (Pvt.) Limited (ATM) is involved in recycling of metals in Pakistan. It imports metal scrap for recycling and exports Copper and Aluminium alloys ingots. It also trades secondary and semi-finished nonferrous and ferrous metals in local market. The exports of Copper and Aluminium have been increasing in recent years for which final destination is China, largest importer of refined Copper, Copper alloys and unwrought Aluminium in particular. Recycling of Copper and Aluminium without taking appropriate measures can be harmful for the environment. While increasing awareness about the environment may lead to more stringent regulations in the future, it could be a risk to manage. The company has obtained requisite clearance from Provincial Environment Protection Agency (EPA), Punjab. As per management accounts, Allah Tawaqal Metals (Pvt.) Ltd posted topline of PKR ~ 7 billion while maintaining its profit margins in FY22. It has an equity base of PKR 1.072 billion due to the reported profits and total borrowings of PKR 760mln (Short term only). Steps taken by management to improve financial transparency coupled with impressive growth in topline of 140% led towards ratings upgrade. The market share is expected to stand ~ 15%. On the other hand, ATM is a family owned and operated business which exposes it to risks of having same management and ownership. The overall governance framework is at initial stages. Company is led by young and enthusiastic management. Financial transparency needs further improvement. Business is vulnerable to regulatory disruptions and volatility in commodity prices in international market as well as issues of stuck-up consignments due to delays in opening and clearance of Letters of Credit.
Sustainability of revenues, adherence to environmental protection regulations, financial transparency, customer stickiness and a credit policy are imperative for the ratings in future. Improving management, governance and control environment are also very important.
Allah Tawaqal Metals (Pvt.) Ltd. is a private limited company incorporated in Pakistan on September 11, 2019 under the Companies Act 2017. It is family owned and operated business with shareholding divided equally among 3 members, Mr. Muhammad Mubeen Arif, Mr. Muhammad Muneeb Arif and Mr. Muhammad Umair. Mr. Mubeen Arif Jutt is the Chairman of board as well as CEO of the company since its incorporation in 2019.