PACRA Maintains the Entity Ratings of Matracon Pakistan (Pvt.) Limited

Matracon Pakistan (Pvt.) Limited (“the Company” or “Matracon”) is a well-established and reputable player in Pakistan’s construction sector, with a strong track record of executing large-scale infrastructure and building projects across roads, bridges, pipelines, canal systems and water supply schemes, primarily for public sector and development-sector clients. The Company benefits from its established market position and longstanding presence in the industry, as well as its standing among the select group of contractors holding the highest category license of the Pakistan Engineering Council. The Company’s credit profile continues to be supported by its established market position, strong execution track record, sizeable order book, diversified portfolio of infrastructure projects, prudent financial management, minimal funded leverage and sound liquidity position. During FY26, reported revenue stood at PKR 20.99 billion compared with PKR 24.83 billion in FY25. The reported revenue is based on provisional financial information and primarily reflects Interim Payment Certificates (IPCs) certified during the year and remains subject to revision upon finalization of the audited financial statements as per IFRS standard. The moderation in reported revenue was principally attributable to the timing of project execution and certification of work, particularly due to delays arising from broader global economic conditions and regional geopolitical uncertainty during the last two quarters of FY26, which affected procurement, LC/trade-related arrangements and raw-material availability, with certain works originally expected to be executed and billed in FY26 deferred to FY27. These deferred works provide revenue visibility for the coming year, while the Company continues to maintain a substantial order book. The lower profitability primarily reflects the timing mismatch between recognition of project-related costs and subsequent certification of revenue, coupled with elevated input costs during the period. All of the Company's contracts contain price escalation provisions, enabling recovery of eligible increases in project costs. Management expects the realization and certification of such escalation claims, together with the execution of deferred works and timely revenue certification, to provide support to revenue and profitability going forward. The Company's liquidity position remains healthy, with cash and bank balances of PKR 5.23 billion at end-FY26. Working capital requirements continue to be managed in line with the normal certification and payment cycles associated with large public-sector and development-sector projects. Matracon remains fully equity-financed, with an equity base of PKR 8.96 billion at end-FY26, compared with PKR 8.38 billion in FY25, while financial leverage remained at 0.0% The Company's substantial liquidity buffer and absence of funded leverage provide adequate financial capacity to meet working capital requirements and support ongoing project execution.
Going forward, developments in public sector development spending and the broader macroeconomic environment will remain a key consideration. Within this context, timely execution of ongoing projects, realization of deferred billings, and timely approval and recovery of price escalation claims will be pivotal to the Company's revenue trajectory and cash generation. The ability to secure fresh awards and maintain a healthy order book, particularly from public-sector and development-sector clients, supported by prudent working capital management, will remain a key rating driver. Continued strengthening of the governance, financial reporting and internal control framework will also support the Company's institutionalization and long-term stability.

About the Entity
Matracon Pakistan (Pvt) Ltd. was established by Mr. Mohammad Abdul Qadir in 1995 and later converted into a private limited company in 2006. The director roles are held by Mr. Mohammad Abdul Qadir and Mr. M. Ayub, who are the only board members and 'Active' shareholders. Mr. Jehanzeb Saulat continues to serve as the Chief Executive Officer of Matracon Pakistan (Private) Limited, while the finance function is overseen by the Chief Financial Officer, Mr. Akhwanzada Shahid Ali.