PACRA maintains Entity Ratings of Jasons Commodities

TThe ratings reflect the emergence of Jasons Commodities ('the Business') as a growing rice exporter. Founded as a sole proprietorship, the Business specializes in the processing of semi-processed non-basmati rice. The Business has marked its presence in China and African regions through strategic relationships and is committed to increasing its foreign footing. Under the astute leadership of Mr. Danish Jessani, the sole proprietor, Jasons Commodities leverages a well-equipped operational infrastructure to navigate the global rice export market successfully. The rice sector, a significant contributor to Pakistan's agricultural economy, representing approximately 3.5% of agricultural value addition and 0.7% of the nation's Gross Domestic Product (GDP), experienced a substantial surge in production during the fiscal year 2024 (FY24). This surge, coupled with heightened global demand and a temporary export ban imposed by India, propelled a remarkable 35% increase in rice production. Consequently, basmati rice exports experienced a significant boost, soaring from $650 million to $876 million in FY24. Furthermore, exports of non-basmati rice witnessed a substantial surge, increasing from $1,498 million to $3,054 million during the same period. Building upon this positive trajectory, Jasons Commodities exhibited robust revenue growth, with sales increasing by 49%. This strong top-line performance translated into a 39% increase in gross profit. While net profit growth moderated slightly at 36%, this is primarily attributable to the significant sales expansion. Notably, the Business maintained relatively stable gross and operating margins throughout this period, indicating consistent profitability. Despite an increase in borrowings, the Business has improved its leverage position due to a corresponding increase in equity. The financial risk profile of the Business is strong; however, qualitative factors indicate room for improvement.
The ratings are dependent on the management's ability to materialize the envisioned strategies keeping costs in control and maintaining business margins. Significant improvement in business and financial profile would be good. The management has undertaken to improve audit quality and financial transparency in the coming period is also an important factor for the rating. Any significant and/or prolonged deterioration in revenues and/or coverages will adversely impact the ratings.

About the Entity
Jasons Commodities (‘the Business’) was incorporated in Dec-2012 as a Sole Proprietorship. The Business has witnessed exponential growth since inception owing to the streamlined vison of the management. The production facility of the Business includes a rice mill with a capacity of processing 20MT of rice per hour. The Business’s ownership resides with the CEO, Mr. Danish Jessani.