PACRA Assigns Entity Ratings to Jazaa Global (Pvt.) Limited

Jazaa Global (Private) Limited (‘Jazaa’ or ‘The Company’) ratings reflect the adequate financial profile of the Company. The effective use of brand equity signifies adept navigation in both local and global markets. The company’s extensive portfolio of ethnic products meets the diverse needs of consumers across 55+ countries and 100+ cities within Pakistan, showcasing a rich variety of over 200 stock-keeping units (SKUs). The production plant is located in Karachi with an annual capacity of Rice being at 40,400 MT and Salt at 4000 MT. The sponsors’ industry-specific experience, coupled with their strategic insights, enhances the company’s operational prowess. Furthermore, comfort for the assigned rating has also been drawn from sponsors resolute commitment to supporting the Company in case of any financial needs.
Jazaa operates in both local and international markets, with approximately 50% of its total revenue stemming from exports and the remainder from the domestic market. The company's revenue streams are diverse, with rice contributing approximately 60% of its total revenue. On the financial profile side, the company experienced a positive trend in its top line, primarily due to increased sales volume. In FY23, the company achieved a total revenue of ~PKR 1,703mln (FY22: ~PKR 1,247mln), marking an increase of ~ 37%. However, the Company faced challenges with rising raw material costs due to inflation, impacting its gross profit margin declined from ~36.5% in FY22 to about ~26.9% in FY23. Furthermore, because of higher finance costs, the net profit margin stayed relatively low at around 1.4% in FY23, similar to FY22. The Company has experienced an increase in net working capital days compared to FY22, driven by extended inventory and trade receivable cycles. This adjustment adversely affected cash flow coverage, exacerbated by heightened finance costs, resulting in a decline in the interest coverage ratio during FY23. The Company has a moderately leveraged capital structure comprised by the short-term debt which has increased substantially to cater to the increasing needs of working capital management. Jazaa's executive leadership consistently demonstrates effective financial management, essential for maintaining an adequate credit profile. The company's proactive response to market dynamics and adherence to global standards in product quality, customer satisfaction, and industry benchmarks are supportive factors for its credit rating assessment.
The ratings are dependent upon the management’s ability to sustain margins while remaining self-sufficient and in surplus for expansionary measures. Sound financial discipline remains critical. Prudent management of the working capital, maintaining sufficient cash flows, and coverages remain crucial for the ratings.

About the Entity
Jazaa Global (Pvt.) Limited, established in 2015 under the repealed Companies Act’17, began operations in March 2016 with a vision inspired by the late Mr. Junaid Jamshaid. It aims to serve consumers globally and domestically with a diverse range of ethnic products. Mr. Shahid Tawala, a respected figure with three decades of expertise in Pakistan's rice milling industry, chairs the board. Leading the company as CEO is Mr. Ali Jabbar, backed by a dedicated team of seasoned professionals.