PACRA has maintained the entity ratings of DESCON Engineering Limited

Descon Engineering Limited (“Descon” or “the Company”) is a leading engineering and construction company in Pakistan, operating across the Oil & Gas, Power, Hydropower, Cement, and Renewable Energy sectors. The Company specializes in Engineering, Procurement, and Construction (EPC) services and is part of the Descon Group of Companies (“the Group”), which brings over four decades of execution experience. In addition to its domestic operations, the Group has established a growing international footprint across the Middle East, South Africa, and the recently added Azerbaijan market, offering the same bouquet of services as in Pakistan. These overseas operations, together with management’s strategic shift toward higher-margin foreign projects and reallocation of resources accordingly, have become a key driver of consolidated revenues and foreign currency–linked cashflows, strengthening earnings resilience, reducing concentration risk, and providing an incremental cushion to overall performance.; and is reflected in the assigned “Positive Outlook”. Domestically the Company’s sizeable engineering backlog underpins multi-year earnings visibility and supports cashflow predictability, while contractual escalation clauses across core projects provide protection against inflation and currency depreciation, supporting margin stability. As of FY25, execution progress on major projects remains satisfactory, including the Mohmand Dam, which continues to translate into certified billings and collections; given its material contribution to overall volumes and working capital requirements, it remains a key monitoring factor. While the domestic order book has moderated, it remains substantial. Financial risk indicators remain adequate, with a significant portion of non-funded obligations representing an inherent requirement and central aspect of EPC operations. Funded lines remain moderate, reflecting moderate leverage, a strengthened equity base, and manageable debt levels. The inherently working capital–intensive nature of the business continues to constrain the risk profile; however, this is partially mitigated by strategic liquid reserves maintained at the Group level. The Group’s centralized resource planning and deployment framework further enables optimal allocation of capital, technical expertise, and operational capacity across geographies, enhancing execution efficiency and reinforcing its competitive advantage.
The Company benefits from strong sponsor ownership and continued group support, providing operational stability and financial flexibility. A sizable overseas order book, primarily denominated in foreign currency, reduces reliance on domestic cashflows, while milestone-based billings and timely collections—support adequate liquidity. Going forward, timely execution of ongoing projects, coupled with the buildup of the domestic order book and continued support from foreign operations, will remain important to sustaining operational performance and strengthening the overall profile of the Company.

About the Entity
Descon Engineering Limited was established as a private limited company in Pakistan on December 15, 1977, and transitioned to an unquoted public company on November 29, 1997. The majority of the Company's shares, 99.9%, are held by DEL Projects (Private) Limited. Founded by Mr. Abdul Razzak Dawood, a visionary entrepreneur and former CEO of Descon, the Company was built with a strong commitment to creating a lasting institute in the engineering sector. Mr. Dawood's successors, Mr. Taimur Dawood and Mr. Faisal Dawood, continue to uphold this vision, serving on the Company's board as Chairman and Vice Chairman, respectively. The leadership team at Descon is comprised of highly skilled professionals with decades of industry experience. The CEO, Mr. Taimur Saeed, brings over 30 years of expertise to the Company, driving its strategic direction and growth.