Hadeed Pakistan (Private) Limited (‘Hadeed Pakistan’ or the ‘Company’) was incorporated in FY 2013 as a Private Limited Company under the Companies Act, 2017.The Company became operational in 2019. Headquartered in Lahore at 135 B, Block A, Muslim Town, the Company has established its manufacturing operations in Sheikhupura at Dera Masjid Wala, Qila Sattar Shah Stop, 23 Km Kot Pindi Daas Road.

The driving force behind Hadeed Steel is its main sponsor, Mr. Hamid, a seasoned professional with nearly three decades of extensive experience in steel trading and pipe manufacturing. Recognizing the evolving demands of the steel industry and aiming to diversify his portfolio, Mr. Hamid, along with his brothers, conceived the idea of establishing a cold-rolled steel sheet manufacturing facility in the late 1990s. Building upon their success in the steel trading domain, Mr. Hamid took a significant step forward in 2005 by launching a pipe manufacturing business. This move laid the foundation for a broader industrial vision. In 2007, as part of their long-term expansion strategy, a land specifically for setting up a state-of-the-art cold-rolled steel sheet manufacturing plant was acquired. The development phase was carefully planned over the years. From 2012-2013, the group procured essential machinery, including a modern rolling mill and annealing equipement, further solidifying their commitment to establishing a fully integrated steel manufacturing facility. To formalize the venture, the company was incorporated, and by 2019, amid the early days of the COVID-19 pandemic—the manufacturing plant became operational. Despite facing formidable challenges shortly after commencement, including the global COVID-19 crisis and import restrictions that affected equipment and raw material supplies, Hadeed Steel demonstrated resilience.

The Company is engaged in the manufacturing of cold-rolled steel sheets and coils, serving diverse industries including automotive, construction, engineering, and home appliances. The production process at Hadeed Pakistan is fully integrated and includes pickling (to remove surface impurities), cold rolling (to enhance mechanical strength and surface finish), annealing (for improving ductility), temper rolling (for fine thickness control), slitting and cutting (to customize dimensions), and final packing and loading for dispatch. Hadeed Pakistan operates a state-of-the-art facility with an annual rolling capacity of 300,000 metric tons.

The Company is owned 100% by Hamid Daud and family members. Major shareholding of having stakes higher than 5% resides with the following:
1.      Hamid Daud = 17.17%
2.      Hammad Khalid = 13.55%
3.      Hamza Daud = 12.84%
4.      Zaid Khalid = 8.74%
5.      Saad Khalid = 8.74%
6.      Abdul Hayee Mughal = 5.83%
7.      Hafiz Aziz Ahmad = 5.63%

The business, established over years where the founders have strong connections in not only the industries where the cold roll steel is used but also in other corporates such as banks, helping them in smooth running of the business. It was incorporated in 2013 with commercial production starting in 2019. The second generation of the business has also been involved as Director Commercial and Corporate and GM Technical. The shareholding remains within the family. However, there is no such established well-known group in the sponsors of the company.

The family has a decent history of operating in the steel industry. In the year of 1991, they joined in as traders of steel pipes. At this time only Mr. Hamid Daud and Mr. Hammad Khalid were involved. Later on in 2007, Mr. Zaid Khalid joined followed by Mr. Saad Khalid. Hadeed Pakistan’s board having experienced members on board makes them able to operate the business successfully, with growth being witnessed each year. Hadeed Pakistan has 6-high cold rolling mill which offers advantages over 4-high mills due to its ability to maintain better control over the work roll during the rolling process, leading to improved surface finish, tighter thickness tolerances, and enhanced flatness of the final product and this machine is only available with them. The project was incorporated in 2013 with commercial production starting in 2019.

The Company is fully equity financed with a minimal long-term debt on their books. The financial strength of the sponsors is considered adequate.

Hadeed Pakistan (Private) Limited’s board comprises a blend of seasoned professionals and founding members. The leadership includes Mr. Hamid Daud as Chief Executive Officer. Other key members are Mr. Hammad Khalid, Mr. Saad Khalid, Mr. Zaid Khalid and Mr. Hamza Daud. All the members are having stakes of more than 5% each in Hadeed Pakistan (Private) Limited. The board's composition reflects a concentration of executive roles within the founding family, indicating a closely held governance model. The absence of independent directors and limited diversity suggest potential areas for enhancing board independence and oversight.

The executive management team at Hadeed Pakistan (Private) Limited comprises dynamic professionals who drive the company’s strategic and operational execution. Mr. Hamid Daud serves as the Chief Executive Officer, leveraging over 30 years of steel pipe trading and manufacturing industry experience to oversee corporate leadership, growth initiatives, and market expansion. Mr. Hammad Khalid, the founder and Chief Operating Officer, leads core production functions and plant operations, ensuring seamless manufacturing performance and efficiency, he has 13 years of experience in the steel sector. Mr. Saad Khalid, Director of Administration and Human Resource, manages internal controls, HR policies, and administrative infrastructure, contributing to organizational stability. Mr. Zaid Khalid, as Director of Strategy and Project Planning, focuses on business innovation, digital transformation, and future-oriented planning, he is a graduate from Minnesota State University, USA. Supporting commercial outreach, Mr. Hamza Daud functions as the Director of Commercial & Corporate Affairs, handling key client relationships, strategic partnerships, and corporate branding. The management team plays a critical role in aligning day-to-day functions with the company’s long-term objectives, operating with agility and a shared vision rooted in family leadership. All of the board members are associated with the board since 06 June 2013 except for Mr. Saad Khalid who joined on 28-10-2023.

The board meets at least once a month to discuss the operational and market matters at length, which usually include:
·       International HRC market and booking status
·       Market update regarding finished product sale
·       Inventory situation and material sourcing timelines
As a family-owned and operated business and no independent director on the board, there’s a risk of overlapping management and ownership roles. The governance framework is still in its early stages and requires further development.

The external auditors of the company, KPMG Taseer Hadi & Co, have expressed an unqualified opinion on the financial statements of the company as of 30th June 2024. The firm is placed in category ‘A’ of the SBP panel of auditors and rated as a QCR firm.

Hadeed Steel follows a family-driven, flat organizational structure, led by CEO and Chairman Mr. Hamid Daud. Key roles are held by family members, including the COO, Director Strategy, Director HR/Admin, and Director Commercial. Daily operations are managed directly by the sponsors. The structure is evolving, with professional systems like ERPNext and formal committees being introduced to strengthen governance.

Mr. Hamid Daud, with over 3 decades of experience and being the founder is also the CEO of the company and chair of the board of directors. His vast experience enabled him to enter a highly competitive market dominated by two well-established players with relative ease. These relationships not only facilitated early sales but also helped him cultivate amicable ties with key institutions, including banks and financial partners, which proved instrumental in supporting the company's growth and operations. Mr. Zaid Khalid with a degree from Minnesota state university spearheads the strategy, technology and planning department. Mr. Hammad Khalid works as the Chief Operating Officer. Along with this the 4th brother is Director Admin and HR. The last member of the BoD is Hamza Daud who is working as director Commercial and corporate.

As a family-owned business with a relatively flat organizational structure, where the sponsors oversee the day-to- day operations, Hadeed would benefit from establishing a formal committees structure with independent directors involved.

Being a specialized industry of Cold-Rolling steel there was no off the shelf specific ERP available in the market. Due to this above-mentioned reason a custom build ERP was introduced which has kept evolving over periods. Few months back ERPNext software was selected after careful research and consideration, it is of industrial strength and is being used by major businesses around the globe.
The existing ERP system is based upon Microsoft .NET framework and SQL server. By the next financial year Hadeed plans to shift its business fully to ERPNext with currently the human resource management system have been implemented and currently the process of deploying Purchase and Store management software.

The control environment is still evolving, with no internal audit department. The company has obtained ISO 9001, 14001 and 45001 certifications. There exist 3 committees which include management committee, HR and HRC procurement committee. The company is a green field project, which is a new venture that starts from scratch, building on a previously undeveloped site or with a completely new system or infrastructure, without any prior existing structure or processes, due to this it takes time in true implementation of a controlled environment.

The steel industry is categorized into three major segments based on products (i). Long steel products which consist of billets, rebar & beams (ii). Flat steel products which include hot rolled coils (HRC) & cold rolled coils (CRC) and (iii). Tubes & pipes. Long steel products contribute around 55-65%, flat steel products 30-35%, tubes & pipes around 8-10% and other products contribute 3-5% of the total steel sales. The demand for Flat Steel products is generated through various industries including autos (motor cycles), consumer durables, pipes, construction material, etc. There are three local players currently involved in supplying the CRC. International Steel Mills Limited – ISL (Since 2007) - Karachi Aisha Steel Mills Limited – ASML (Since 2005) - Karachi Hadeed Pakistan (Pvt) Limited (Since 2019) – Lahore Due to lower economic growth, high inflation and imported raw material various reason the market size of the CRC products has shrunk by almost 40%. However, with the improvement in monetary regulations and a stable exchange rate the market has seen signs of recovery in FY 24.

The CRC sales trend over the past six fiscal years highlights a significant shift in market dynamics, with Hadeed emerging as a strong competitor. Hadeed’s sales surged from just Rs 47 Million in FY19 to 19,264 Million in FY24, showing consistent year-on-year growth. In contrast, the sales revenue witness a decline of 34% and 24% respectively for ASL and ISL during last two financials years. While traditional players lost substantial market share, Hadeed’s share rose to nearly 35% of the total. Although it was third till FY23, the year in which industry had a fall in sales overall but it recovered well when compared to its competitors and showed a growth trend in FY 24. Hadeed holds a significant geographic advantage by being the only CRC mill located in Punjab, enabling it to capture approximately 70% of the regional market and a substantial share in the northern region of the country. In addition to geographical advantage Hadeed has 6-high cold rolling mill which offers advantages over 4-high mills due to its ability to maintain better control over the work roll during the rolling process, leading to improved surface finish, tighter thickness tolerances, and enhanced flatness of the final product and this machine is only available with them. However, the competing players hold a competitive edge by offering a broader range of products and benefiting from their strategic location in the southern region of the country, which allows them easier access to export markets.

In the nine months ended March 2025 (9MFY25), Hadeed reported gross sales of PKR 17.73 billion, reflecting a marginal increase from PKR 17.63 billion in the same period last year (SPLY). However, net sales for March 2025 declined slightly to PKR 14.55 billion, compared to PKR 14.63 billion in March 2024. It is important to note that there had been change in the accounting treatement of trade discounts which had lead to the slight decline in net sales.

The Company continues to focus on maintaining the quality of its products by utilizing high-grade imported raw materials. As of March 2025, gross margins stood at 8.8% (Jun-24: 11.8%), reflecting some pressure due to raw material costs. Consequently, operating margins were reported at 7.8% (Jun-24: 10.3%), indicating a slight improvement over the prior 6-month period. Finance cost as a percentage of sales stood at 2.7% (Dec-24: 3.1%, Jun-24: 3.1%), showing a reduction and easing financial burden. As a result, the net profit margin for March 2025 was recorded at 2.9% (Jun-24: 4.0%). Despite moderate sales revenue growth of 0.7% from Comparable 9-month period, the Company sustained profitability and maintained strong operating efficiency during the period. Located in Lahore, Hadeed lacks direct port access, which limits its export competitiveness compared to Karachi-based peers. Rising electricity costs continue to strain margins given the energy-intensive nature of operations; however, the planned installation of a 2 MW solar plant will help mitigate this risk. Additionally, excess industry capacity, 2 million tons against demand of just 350,000 tons, intensifies pricing pressure and results in underutilization. On a positive note, the company’s ongoing plans of expansion into galvanization will diversify its product mix and enhance value addition, supporting future growth.

Hadeed Pakistan (Pvt.) Limited, despite its rapid growth in the Cold Rolled Coil (CRC) segment, faces notable sustainability challenges. A small number of key dealers account for a substantial portion of total sales. Moreover, Hadeed’s complete reliance on imported Hot Rolled Coils (HRC) from Japan, Korea, Taiwan, and China heightens its exposure to global supply chain disruptions and foreign exchange volatility, posing additional risks to its operational stability and long-term profitability.

Hadeed manages working capital primarily through internal cashflows and short-term borrowings. Gross working capital days improved to 89 in Mar-25 (Jun-24: 93 days). Inventory days reduced to 72 (Jun-24: 80 days) showing better stock control. Trade receivables rose to 18 days (Jun-24: 13 days) amid slower collections. Overall, working capital cycle has improved with adequate liquidity.

Coverage metrics slightly weakened from Jun-24 to Mar-25. EBITDA/Finance Cost dropped to 3.6x (Jun-24: 3.8x), while FCFO/Finance Cost remained steady at 4.3x (Jun-24: 3.8x). Debt payback improved to 0.1x (Jun-24: 0.1x), sustaining repayment ability. Interest payable days improved to 19.2 days (Jun-24: 50.7 days), indicating better financial discipline. Though FCFO growth turned slightly negative (-0.4% vs Jun-24: 66.3%), overall coverage remains sufficient, supported by stable operational cashflows and improved financing terms.

Capitalization continued to improve in Mar-25 compared to Jun-24. Total borrowings to capitalization dropped to 36.2% (Jun-24: 52.3%), indicating a shift towards a less leveraged structure. Short-term borrowings continued to dominate, making up 95.4% of total borrowings (Jun-24: 97.9%), though slightly reduced. The company’s balance sheet remains healthy with improved debt metrics and stronger liquidity buffers compared to Jun-24.