Press Release
VIS Reaffirms Entity Rating of Sachal Engineering Works (Pvt) Limited
Karachi, July 15 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Sachal Engineering Works (Pvt) Limited (‘SEWL’ or the ‘Company’) at ‘A-/A2’ (Single A minus / A two). 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. Outlook on assigned ratings is ‘Stable’. Previous Rating action was announced on November 18, 2024.
Incorporated in 1990, SEWL is a private limited company engaged in the business of road and other infrastructure development including expansion, planning, designing, implementation, construction, and execution of related projects. SEWL is a licensed ‘C-A’ Contractor by the Pakistan Engineering Council, allowing it to undertake projects without any contract price limit. In addition, the company invests in public-private partnership (PPP) based projects.
The assigned ratings incorporate the business risk profile of SEWL, which is underpinned by the long-term nature of government infrastructure projects, providing earnings stability and revenue visibility through predetermined returns over the project life. The liquidity profile is supported by allocation of funds in the respective federal/provincial budgets, resulting in timely payments, while contractual price escalation mechanisms largely mitigate cost overrun risk. Nevertheless, delays in project execution remain an inherent risk associated with the construction business. The Company's revenue profile is concentrated, with the Ghotki-Kandhkot Bridge project remaining the largest contributor. Meanwhile, cash flow generation is considered healthy and debt coverages are strong.
SEWL’s capitalization profile remains elevated, when adjusted for its sizeable investments in subsidiaries and joint ventures, which provides a clearer assessment of leverage attributable to company's core construction operations. Accordingly, prudent management of leverage and debt utilization towards core business will remain important considerations. It is also noted that the Company’s investing business have not yet commenced generating dividend income. Going forward, successful bids for new projects as well as commencement of cashflows from the investment portfolio while managing overall capitalization profile will remain the key rating factors.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
VIS Rating Criteria: Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf