PACRA Assigns Initial Entity Ratings to Descon Engineering (Private) Limited

Lahore, March 22, 2021 (PPI-OT): Descon Engineering Ltd. is Pakistan’s leading engineering enterprise. The company, Descon Engineering Ltd., has a deep understanding of and expertise in sectors like Oil and Gas, Cement, Power, Hydro Power, and Renewable Energy, to name a few. They carry a specialization in EPC, Infrastructure, Construction, and Manufacturing apart from maintenance services and automation. As evident from the name, Descon Engineering Ltd. is part of the Descon Group. The Group possesses a wealth of experience gathered over more than four decades and has a presence in multiple sectors of the economy. The Group has a presence outside Pakistan as well, primarily across the Middle East.

Foreign operations provide the same bouquet of services as offered domestically by Descon Engineering Ltd. The profitability at a consolidated level is significantly promising. Profitable operations of other group companies lend further support. Given the nature of the business, the Company is in no need of a huge capital funding base, when compared to the size of projects it undertakes. The non-funded obligations are integral to the business operations. Hence, working capital management takes precedence, wherein which the management has acquired the expertise to manage. The group has a practice of keeping liquid strategic reserve, providing a cushion against unforeseen risks.

Another pivot and indeed the first one is the business pipeline. The Company has a history of sustaining its business flow. The current basket of projects is quite healthy. The Company has a very large project in the Hydro Power segment. The business is being managed by an independent and able team. The governance practices despite the unlisted status of the Company are strong; so is the control environment. Rating is dependent upon several contracts successfully completed and upcoming mega projects undertaken by management to streamline its business for improved profitability, which is pivotal for considerable growth.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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