Press Release
VIS Reaffirms Entity Ratings of Crescent Steel and Allied Products Limited
Karachi, April 28, 2026: VIS Credit Rating Company Limited reaffirms entity ratings of Crescent Steel & Allied Products Limited ('CSAP' or 'the Company') to 'A-/A2' (Single A minus/A-Two) with a 'Stable' outlook. Medium to long term rating of 'A-' indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short-term rating of 'A2' indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Previous rating action was announced on December 17, 2024.
The assigned ratings reflect Crescent Steel and Allied Products Limited’s established presence in Pakistan’s steel and engineering sector, supported by its operating track record and diversified business segments. The ratings incorporate the Company’s business profile, underpinned by contributions from the Investment and Infrastructure development Division (IID), along with secured projects that provide a degree of revenue visibility over the medium term. However, the business remains largely dependent on project flows, resulting in earnings volatility and uneven capacity utilization, while high client concentration continues to act as a constraint. Nonetheless, its position as the leading domestic producer of large diameter API-grade pipes provides meaningful competitive leverage.
The Company maintains a conservative capital structure, characterized by low leverage and limited reliance on external borrowings, supporting strong coverage metrics and financial flexibility. Profitability remains mixed, with pressure on core margins from lower capacity utilization and higher input costs. Net earnings receive additional support from non-core income, primarily from the IID Division, while the recent divestment of other non-core businesses allows the Company to focus more on strengthening its core operations.
Liquidity remains adequate, supported by improved coverage indicators, although the working capital cycle remains stretched. Key rating sensitivities include sustaining core margin improvement, reducing dependence on non-operational income in light of reduced ancillary contributions, and effective working capital management while preserving liquidity and coverage metrics.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf