PACRA Maintains Entity Ratings of Steelex (Pvt.) Limited

Steelex has been a key player in the piping industry for nearly four decades, specializing in manufacturing and selling Mild Steel (MS), Galvanized Iron (GI) pipes, and a comprehensive line of UPVC and CPVC pipes and fittings. Operations are carried out through two manufacturing facilities located in Karachi, equipped with state-of-the-art machinery and technology. During FY25, the Company achieved significant sales growth of 38.9%, driven primarily by robust domestic demand. The steel segment continued to anchor the business by sustaining production volumes and serving as the primary driver of profitability due to its higher margin profile. Meanwhile, the PVC division's revenue grew significantly during FY25, rising by approximately 64.8%, driven primarily by higher selling prices rather than volume as actual production declined. Despite strong sales growth, profitability margins contracted during FY25 as the cost of sales and operating expenses grew at a faster pace than revenue. The Company undertook significant capital investments in property, plant, and equipment during the year, reflecting its commitment to modernize and expand production capacity. These investments were primarily funded through long-term borrowings, resulting in a temporary moderation of coverage ratios. However, the Company continued to demonstrate its ability to generate sufficient internal cash flows to support its operations and service its debt obligations. Working capital management has shown significant improvement during FY25, reflecting management's effective execution of corrective actions and a more efficient operational framework, driven by disciplined inventory and receivable management.
The ratings assigned to Steelex factor in the moderate business risk profile of the allied steel products sector, characterized by fragmentation, intense competition, and raw material price sensitivity linked to exchange rate fluctuations. As a family-owned and operated business, Steelex benefits from experienced sponsors whose continued support has been instrumental in navigating industry challenges. Going forward, sustaining demand and strengthening governance and control environment remain key priorities. The Company's strategic investments in capacity expansion are expected to support future growth and margin recovery.

About the Entity
Steelex (Pvt.) Limited is a mid-sized manufacturing company offering high-quality steel and allied products in line with international standards for industrial, commercial, and residential applications. Established in 1985 by the late Chaudhry Muhammad Sabir, Steelex is now managed by his three sons, Mr. Zahid Ali, Mr. Shehzad Sabir, and Mr. Kashif Sabir, who serve on the board alongside their mother, Ms. Kausar Jabeen. The leadership is supported by a team of seasoned professionals who have been long associated with the Company.