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PACRA Maintains the Entity Ratings of Descon Engineering Limited

Lahore, March 18, 2023 (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. The Company carries 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 Companies. The Companies possess a wealth of experience gathered over more than four decades and has presence in multiple sectors of the economy.

The Companies have 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 and lend further support to the Company. The Companies have a practice of keeping liquid strategic reserve, providing a cushion against unforeseen risks. Descon Engineering Ltd. has a history of sustaining its business flow.

The current basket of projects is quite healthy with a mammoth project in the Hydro Power segment. In spite of economic turmoil company was successful to post viable growth in revenues during FY22 because of the built in escalation clauses with its clients which provides a hedge against inflation as well as Pak Rupee Devaluation. Going forward, company has stout projects in its basket ensuring the sustainability. 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.

However, the non-funded obligations are integral to the business operations. Hence, working capital management takes precedence, in which the management has acquired the expertise to manage. The strength of the company lies in sourcing the future contracts and maintaining its pipeline. 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

The post PACRA Maintains the Entity Ratings of Descon Engineering Limited appeared first on Business News Pakistan.

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