PACRA Assigns Entity Ratings to Irfan Noman Brothers (Private) Limited

The ratings derive strength from Irfan Noman Brothers (Private) Limited (‘the Company’) sustained market position as one of Pakistan’s established rice exporters. The Company has demonstrated stability in maintaining its market share over the years. It’s customer retention strategy, supported by marketing offices and warehouses in Dubai and Canada, has been effectively executed. Irfan Noman’s Board is largely composed of members from the sponsoring family, including three Executive Directors. The Board is further supported by its sub-committees and a seasoned management team, which collectively enable the Company to effectively navigate the challenges inherent in the rice sector. Industry insights reveal that Pakistani rice exporters generated a historic $3.93 billion in foreign exchange during FY24, exporting approximately 6 million tons of rice. This achievement was largely facilitated by India's temporary ban on rice exports following a short crop, positioning Pakistan to capitalize on its competitive standing in the global market, where India remains a key rival. In this context, Irfan Noman Brothers has reported an impressive 84% growth in sales. The Company primarily derives revenue from the export of non-basmati rice variants, with key markets including Malaysia, China, and Africa, complemented by smaller contributions from other regions. Additionally, the Company is involved in the trading of solar panels, corn, and polypropylene, providing a diversified revenue stream that further strengthens its financial resilience. The Company demonstrated stability in FY24, though gross margins contracted, reflecting challenges in managing rising costs despite operational efforts. Additionally, the net profit margin eroded significantly, contracting to 0.1% (FY23: 1%), It is due to heightened finance cost and increase of raw materials costs. The Company’s capital structure is assessed as sound, underpinned by its reliance on short-term borrowing to manage working capital requirements. Leverage reduced to 58% in FY24 (FY23: 60%), reflecting a prudent approach to managing financial exposure. Furthermore, ratings take comfort from the sponsors’ depth of experience and unwavering commitment to accelerating the Company’s growth, this reinforces the ratings and strengthens the outlook for sustained operational success.
Prudent management and maintenance of a stable financial risk profile, especially in terms of the working capital, cash flows, and coverages is imperative for the ratings. Additionally, debt servicing, capitalizing international demands, and envisioned improvements in qualitative factors, going forward, remain crucial for the ratings

About the Entity
Irfan Noman Brothers (Private) Limited (‘the Company’), established in February 1998 as a Private Limited Company, is primarily involved in processing both semi-processed non-basmati and basmati rice. The Company exports its products to Malaysia and over 40 additional countries, with a robust processing capacity of 360,000 metric tons annually. The leadership is spearheaded by the sponsors, Mr. Irfan Ahmad Sheikh, Chairman of the Board, and Mr. Noman Ahmad Sheikh, the CEO, whose strategic oversight continues to guide the Company’s operations.