Press Release

VIS Assigns Initial Ratings to Al-Bario Engineering (Pvt.) Limited

Karachi, January 17, 2022: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Al-Bario Engineering (Pvt.) Limited (AEPL). The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamentals and liquidity factors. Outlook on the assigned ratings is ‘Stable’.

AEPL operates in service industry, primarily providing electrical, mechanical and construction services to various national and multinational organizations. The company has been working with leading original equipment manufacturers (OEMs) and engineering procurement and construction (EPC) contractors in Pakistan. Topline has remained largely stable on a timeline basis. Major portion of revenue emanates from operations & maintenance (O&M) and electrical & mechanical (E&M) works and other services while remaining constitute revenue from construction projects and indenting commission. The management projects some growth in topline from construction projects, going forward. Gross margins have remained healthy and depicted stability over the years while net margins have also improved slightly over the last couple of years with some rationalization of operating costs. The ratings derive comfort from sound liquidity position in terms of sizeable cash flow coverages. Meanwhile, effective receivable collection to avoid cash flow mismatches would remain imperative for the assigned ratings. The capitalization indicators have remained comfortable over the years amidst low level of borrowings and other liabilities relating to working capital on account of its presence in service industry and sufficient internal capital generation. However, the ratings will remain dependent on increase in revenue, maintenance of sound margins, adequate coverages and conservative capital structure while effective management of business risks related to inherent uncertainty in the bidding process and receivables collection.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at

Faryal Ahmad Faheem
Deputy CEO

VIS Entity Rating Criteria: Corporates (August 2021)

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