Rating Details	Rating Type	BFR
	Dissemination Date	Current (30-Nov-23 )
	Action	Initial
	Rating	BFR 3+
	Outlook	Stable
	Rating Watch	-

Rating Rationale	Factor	Comment
	Ownership	DEL is a part of First Dawood Group having presence in multiple sectors such as capital markets, power sector, education sector, etc. 50% of the Company's shares are free float, owned by individuals a
	Governance	The Company has a sound governance structure with a seven-member board. Two independent directors are present, and the board committees are all chaired by independent directors, enhancing the oversigh
	Management and Client Services	A lean organizational structure is present with the focus being on operational efficiency. An experienced and qualified management team provides comfort to the rating. Client services are considered a
	Internal Controls and Regulatory Compliance	The board audit committee oversees the outsourced internal audit function, resulting in a sound internal control environment. Presence of requisite policies is noted; however, room for improvement exi
	Business Sustainability	DEL's topline is concentrated to equity brokerage, with diversity present in the form of underwriting. During 1QFY24, the Company earned ~PKR 14mln (SPLY: ~PKR 11mln) as operating revenue, with a prof
	Financial Sustainability	A low-leveraged capital structure provides support to the rating. DEL has an adequate equity base of ~PKR 255mln at end-Sep'23.

Key Rating Drivers

The Brokerage Industry has picked up pace during 1HFY24 due to political stability and positive macro-economic developments. Dawood Equities Limited ('DEL' or the 'Company') plans to take advantage of the market boom by focusing on new retail clientele in untapped areas to enhance its market share. Moving forward, the materialization of planned revenue and geographical diversification is important for the rating. Maintenance and enhancement of market share and sustainability and growth in revenue and profitability remain vital. Meanwhile, it is imperative to uphold robust internal controls, retention of key management personnel, and diligently monitor risks.

About the Entity
	Legal Structure	Listed
	Year of Establishment	03-May-06
	Type of License	Trading and Self-clearing
	Majority Ownership	Ayaz Dawood (~19%)

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Hassaan Ahmad Hassaan.Ahmad@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-23	Sector Study | Brokerage & Securities | Jan-23

Disclaimer

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