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PACRA Assigns Initial Entity Ratings to Platinum Steel Mill Private. Limited

Lahore, November 23, 2022 (PPI-OT):Established in 2019 in the industrial sector of Port Qasim, Platinum Steel Mill Private Limited (PSMPL) is a state of the art vertically integrated steel mill that incorporates the latest innovative technologies in manufacturing, efficiency and sustainability. Although the size is small, it is good to grow from. The Company produces high quality deformed steel rebar’s and vertical integration of the steel plant gives it a competitive edge.

PSMPL started its operations in June 2021 and posted topline of PKR 1,452mln in 2022. Projections shared by the management show that revenues may witness heightened growth in FY23 due to low base effect and more in upcoming years through enhancement of melting capacity and development of sales and marketing network. On account of expansion, company may witness an increase in reliance on borrowings to manage its working capital requirements post expansion.

Maintaining optimal mix of capital structure is thus very important. Group’s diversification into other businesses is considered positive and ratings take comfort from the net worth of sponsors. Ratings also incorporate the essence of business’s backward supply chain integration. PSMPL is a family owned and operated business exposing it to risks of same management and ownership. The overall governance framework is at very initial stages and needs improvement. Company is led by capable management. Business remains vulnerable to oscillations in macro-economic financial indicators.

The ratings are dependent upon the company’s ability to enhance its market share through volumetric growth as well as geographical diversification, effective and prudent management of financial risk indicators remains vital. Moreover, improvement of control environment, management and governance framework is imperative.

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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