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The Pakistan Credit Rating Agency Limited

Date
10-Jan-2018
Analysts
Jhangeer Hanif
jhangeer@pacra.com

Muneeb Rashid
muneeb.rashid@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • Corporate Rating Methodology (Jul 17)
  • Correlation between long-term and short-term rating scale (Jun 17)
  • Criteria Modifiers (Jun 17)

Related Research

  • Sector Study | Steel (Jan 18)
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PACRA Assigns Initial Entity Ratings to Bilal Steel Mills (Private) Limited
 Rating Type Entity
Current
(10-Jan-2018)
 Action Initial
 Long Term BB
 Short Term B
 Outlook Stable
 Rating Watch -

Bilal Steel is a distinct player in the steel industry. The company directly caters to the demand of corporate/ mega projects. It has multiple projects to its credit. The ratings reflect small market presence of the company in a large fragmented industry. The company operates on adequate business margins in order to compete in local market, hence Bilal Steel's profitability is commensurate to its size. Bilal Steel has large infrastructural orders in hand which bodes well for the company. The company holds an adequate financial risk profile. The brain of the company is Mr. Farrukh Shahzad Malik also reflecting key man risk. Bilal Steel is a private limited company with two member board – hence board oversight is desired.

The ratings are dependent upon the company’s ability to sustain its market presence. Enhancement of business profile with improvement in financial risk indicators is crucial. Moreover, strengthening of governance framework and human resource is vital.
About the Entity
Bilal Steel Mills (Private) Limited (Bilal Steel), is a private limited company incorporated in 2013, it is primarily engaged in manufacturing and sale of billet steel and D-formed steel bars. The company operates through its registered head office located in Lahore. The plant is located on Sheikhupura Road with installed capacity of 87,500 tonnes of re-rolling and 42,000 tonnes of furance. The entire shareholding of the company is owned by Malik Family.

The overall control of the Company vests in two member board of directors of the sponsoring family. Mr. Farrukh Shahzad Malik, the founder of the company is the key man behind the business. He is the CEO and Chairman of the company, whereas his son, Mr. Bilal Malik is the Managing Director. The company employs an able team of professionals.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.