Press Release

VIS assigns Initial Ratings to Izhar Construction (Pvt.) Limited

Karachi, December 31, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A-1’ (Single A Minus/A-One) to Izhar Construction (Pvt.) Limited (ICPL). The medium to long-term rating of ‘A-’ denotes good credit quality with adequate protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-1’ denotes high certainty of timely payments, excellent liquidity and supported by good fundamental protection factors. Outlook on the assigned rating is ‘Stable’.
The ratings assigned to ICPL take into account company’s association with Izhar Group of Companies having an established footprint in the construction business developed over the years. Financial risk profile is strong as evident from virtually debt-free capital structure, strong liquidity, sizeable coverages and adequate cash balances. Despite, slack economic growth the company’s ability to sustain topline has provided strength to the ratings. The ratings also incorporate inherent synergies and diversification in the group structure, providing implicit strength to the business model. The ratings also assume an uptick in the economic cycle, thereby bringing prospective growth in the company’s revenue. However, the ratings remained constrained on account of presence of the company in high business risk sector involving capsizing of revenues owing to political unrest & instability, regulatory changes and missed completion deadlines. The ratings will remain dependent on timely completion of key commercial projects without any significant cost and time overruns while maintaining healthy sales velocity and collection efficiency, as projected, will remain critical to avoid cash flow mismatches.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz (042-35723411-13, Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 201) or email at info@vis.com.pk.


Javed Callea
Advisor

Applicable rating criterion: Corporates (May 2019)
https://www.vis.com.pk/kc-meth.aspx

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright December 31, 2019 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.