Press Release

VIS Upgrades Entity Ratings of Izhar Construction Private Limited

Karachi, March 27, 2024: VIS Credit Rating Company Limited (VIS) upgrades entity ratings of Izhar Construction Private Limited to 'A/A-1' (Single A/A One). 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 'A-1' indicates high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings remains Stable. Previous rating action was announced on December 12, 2022.

Izhar Construction Private Limted (ICPL or the Company) is a Lahore based Company operating in the civil construction and engineering industry since 1960. The Company is a part of Izhar Group, which is operating in the construction industry since 1959 and includes 10 other companies. ICPL operates three distinct business segments; construction, sales of ready mix concrete, and farming in agricultural sector. The Company also hold stakes in two of its group companies; Green Revolution Pvt. Ltd. and Green Industrial Solutions Pvt. Ltd.

Assigned ratings incorporates the Company’s business risk profile supported by the strong sponsor profile and leading market position within a sector rated as high risk. ICPL's project pipeline continues to provide assurance regarding the assigned ratings, even amidst fluctuating demand. Additionally, the Company's effective cost control measures to mitigate the risk of cost overruns further bolster the ratings.

The ratings also considers the financial risk profile of the Company, which is buoyed by continuous topline growth driven by securing sizable contracts and increasing revenue contribution from other business segments. The margins of the Company are also sound on account of successful contract renegotiations. The assigned ratings further underscore the Company's historic debt-free balance sheet—a trend projected to persist over the rating horizon—thereby strengthening its capitalization, coverage ratios, and liquidity metrics.

Going forward, ratings will remain sensitive to the current uncertainty in the country’s political and economic situation affecting the construction and real estate industry coupled with timely materialization of the Company’s current projects.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.












Applicable 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

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .