PACRA Upgrades the Entity Ratings of Maaksons Engineering Corporation Limited.

Maaksons Engineering Corporation Limited (“Maaksons” or “the Company”) has been in the construction industry for over seven 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 considering the macro-economic factors more suitable towards real estate development to ensure revenue’s sustainability and diversification. However, late in 2023 with the shift in overall economy towards the development side, the Company has once again resorted to its forte of construction of infrastructure-based projects. Due to timely shift in the business model the financial risk profile of the Company improves, which is buoyed by continuous topline growth driven by securing sizable contracts. Following this strategic shift, the Company’s revenue surged from PKR 1.32 billion to PKR 3.13 billion in FY23. This growth trend persisted into FY24, with topline figures rising significantly to PKR 6.96 billion, and is expected to continue going forward. The Company’s profit margins have also strengthened, aided by the successful selection of contracts. Unlike many of its peers, the Company remains highly selective in project acceptance, strategically focusing on fewer, short-duration projects that yield early cash conversion and higher margins. The current project pipeline provides strong assurance of sustained or even improved financial performance, despite fluctuating demand, which has been a key factor contributing to the improved 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 equity base is modest and stood at PKR 5.06bln in FY 24. The Comfort is also drawn from the sponsors' experience and vision to pre-empt business strategy according to the changing landscape.
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 Private 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.