PACRA maintains Entity Ratings of Newage Cables (PVT.) Limited

Newage Cables (Pvt.) Limited (“the Company” or “Newage”) is a leading player in Pakistan’s cable manufacturing industry, offering a diversified product range that includes transmission and distribution conductors, power cables, and solar and housing wiring. Most of the the Company’s revenue is derived from conductor sales to government-owned transmission and distribution companies, reinforcing its leadership in this segment. The assigned ratings reflect Newage’s established industry position, supported by a stable 22% market share, primarily in the central region, and a strong institutional presence in the power and infrastructure sectors. The ratings also consider the Company’s longstanding operating history and the extensive experience of its sponsors, who have deep-rooted expertise in the local wire and cable sectors. The cable manufacturing industry in Pakistan is closely linked to infrastructure development and construction activity. After a slowdown in previous periods due to subdued construction activity and macroeconomic challenges, the industry is expected to experience steady growth going forward. This recovery is supported by ongoing power sector projects, particularly in transmission and distribution, renewable energy initiatives, and expansion in housing and industrial construction. As of FY25, Newage has delivered stable financial performance, with net revenues increasing to PKR 35.1 billion (FY24: 26.3 billion). This growth was supported by dollar-denominated project revenues funded by the ADB, which helped mitigate currency fluctuations. Export sales remain limited, covering markets such as Sri Lanka, Qatar, and the UAE. Gross margins stood at 11.9% (FY24: 12%), while net margins clocked to 3.1% (FY24: 3.9%). The industry’s inherently low margins, coupled with exposure to LME-linked copper prices and exchange rate fluctuations, continue to influence profitability. To mitigate these risks, the Company aligns its inventory levels with confirmed orders, avoiding excessive stockholding and minimizing potential losses from raw material price volatility. Newage’s financial risk profile is adequate, supported by stable cash flows, moderate leverage (39.2%; FY24: 37.1%), and strong banking relationships. Working capital is managed through a combination of internal cash generation and short-term funded and unfunded lines, with no long-term borrowings. While the Company’s focus on the power and infrastructure segment ensures volumetric stability, it also results in extended receivable cycles, with some balances exceeding six months, which constrains working capital efficiency. Leverage is expected to remain within manageable levels, and no additional long-term financing or expansion projects are currently planned.
The ratings remain sensitive to commodity price volatility, infrastructure-led demand cycles, and the Company’s ability to improve margins and optimize receivable management particularly overdue balances beyond six months. In addition, plans for business diversification and strengthening governance remain imperative factors, going forward.

About the Entity
Newage Cables (Pvt.) Limited is a family-owned cable manufacturing company incorporated in Pakistan and is among the largest and oldest cable manufacturers in the country. The Company is engaged in the production and sale of transmission and distribution conductors, cables, wiring, and related products. Its integrated manufacturing facilities, spread over 113 acres in Sheikhupura, serve both domestic institutional customers and export markets, with a product portfolio primarily catering to the power, infrastructure, and construction sectors. The sponsoring family has been associated with the business for several decades, providing continuity in strategic direction and operational oversight.