PACRA maintains Entity Ratings of Newage Cables (Private) Limited

Newage Cables (Pvt.) Limited (the ‘Company’ or ‘Newage’) is amongst the largest and oldest cable manufacturers in Pakistan. The production facility of the Company is spread over 113 acres in Sheikhupura. The ratings assigned to the Company derive their strength from its experienced sponsors having a long-standing presence in the local wire and cable industry. The overall sector's performance is correlated with the infrastructure development and construction activity in the country. Newage offers a diversified product range including transmission & distribution conductors, power cables, and solar & housing wiring. Almost 50% of the Company’s revenue is generated from its sales of conductors to transmission and distribution companies owned by the government, which makes the Company the leading player in the specific product category. Overall, based on the market size of the industry in terms of revenue, the Company has sustained its 22% market share with its main presence in the central region of the country. The Company’s overall financial performance has remained stable as compared to the previous year, with net revenues recorded at PKR 26,263mln (FY23: 27,017mln). Overall margins have witnessed slight improvement backed by steady pricing and declining inflation and interest rates. Gross margins of the Company stood at 12.0% during FY24 (FY23: 11.6%), whereas Net margin was recorded at 3.9% (FY23: 3.0%). With moderate leveraging at 37.1% along with stable cash flows, the Company’s coverages remain healthy. Furthermore, the leveraging is expected to remain within bounds with no further long-term borrowings planned by the management in the near future. However, with accumulating receivables, majorly from government entities, the overall gross working capital days have shown deterioration.
The assigned ratings reflect Newage history of successful operations backed by the sponsor's business acumen. Furthermore, the Company’s stable financial performance emanating from its market position justifies the assigned ratings. Going forward, further improvement in the sale volumes and subsequently market share, which is reflected in the financial performance, along with better management of pending receivables, will contribute positively towards the ratings. Moreover, improvement in the governance structure will have a favorable impact.

About the Entity
Newage Cables (Pvt.) Limited (the ‘Company’ or ‘Newage’) was incorporated in September 1978 as a Private Limited Company. Major shareholding resides with the Azam brothers, and the remaining stake is held by their sons. Mr. Asim Jalil Azam (39.67%), Mr. Amer Bakht Azam (39%), Mr. Adnan Jalil Azam (7.34%), Mr. Alman Jalil Azam (7.33%), and Ali Amer Azam (6.67%). The Company is involved in the manufacturing and selling of transmission & distribution conductors, power cables, solar & house wiring, steel wires, and calcium carbonate. Mr. Asim Jalil Azam is the CEO of the Company and Mr. Amer Bakht Azam is the Director of Manufacturing. They are supported by a team of professionals with vast experience in the respective fields.