PACRA Maintains Entity Ratings of Welcon Chemicals (Pvt.) Limited

Welcon Chemicals (Pvt.) Limited (“Welcon” or “the Company”), incorporated in 1994, operates under its parent, the AllahDin Group of Companies (AGC), a diversified business house operating with 11 companies across multiple business segments. AGC leverages the collective expertise of its team to create synergies across its subsidiaries, and Welcon plays a key role by supporting the Group through integrated operations in agrochemicals. The Company being a dynamic player in Pakistan’s pesticide industry, providing a broad portfolio of insecticides, herbicides, fungicides, fertilizers, micronutrients, plant growth regulators, and seeds through an established network of over 1,000 dealers nationwide. Welcon also undertakes research and development to address evolving agricultural needs and has expanded its portfolio to include locally produced biofertilizers as cost-effective alternatives to urea and DAP-based fertilizers. Raw materials for pesticides are mainly imported from China, while fertilizer inputs are sourced locally, supported by a streamlined procurement strategy and a strong presence in the Punjab region. During FY25, the Company’s topline stood at PKR 2.37bln (FY24: PKR 2.34bln), reflecting modest growth of around 1% compared to a historical average of 7%. In 1HFY26, revenue improved to PKR 1.1bln, as compared to PKR 1.0bln during the SPLY registering a YoY growth of 6%. Gross and net margins improved from 18% and 1.9% in FY25 to 22% and 3.5% in 1HFY26; however, net margins remain below FY23 levels of approximately 6%, which were elevated due to a one-off non-operating income of PKR 82 million. The Company manages its working capital through a combination of internal cash generation and short-term borrowings, while maintaining a modest equity base and a gearing ratio of approx. 30%, supporting a stable and well-balanced capital structure. Going forward, the Group’s associated company, Lyallpur Chemicals & Fertilizers Pvt. Ltd., is undertaking the development of a new SOP (sulfate of potash) plant on land already owned by the Group, for which a request has been submitted to have the site declared as part of a Special Economic Zone. The site currently hosts an operational sulphuric acid facility with a production capacity of approximately 300 metric tons, which is being upgraded in parallel with the SOP plant development. Given that sulphuric acid is a key input in SOP manufacturing, the Group’s in-house production capability provides a significant degree of vertical integration, translating into a structural cost advantage and enhanced supply chain reliability, a positioning that remains relatively uncommon among peers in Pakistan’s agrochemical sector. The planned SOP output is expected to be supplied to Welcon, enabling a shift towards locally sourced inputs and strengthening operational support.
The assigned ratings remain supported by the Company’s established market position, operational track record, and the strategic support it receives from its parent, the AllahDin Group of Companies (AGC), which provides synergies across its diversified businesses. The timely completion of the planned SOP plant by the group company and the realization of the expected operational synergies remain important factors in supporting the Company’s business and financial profile. Sustained improvement, along with continued enhancement in corporate governance, internal controls, and risk management, could support a positive rating revision in the future.

About the Entity
Welcon Chemicals ("Welcon" or "the Company") was incorporated in 1994. The Company stands as a pioneering entity within the Allahdin Group and offers a variety of agri-based productions ranging from urea and DAP-based fertilizers to pesticides and seed varieties. The Company’s plant is located at Industrial Estate Multan. Welcon is majorly owned by Mr. Zain Iftikhar (~68%), followed by Ch. Zia ur Rehman (~15%), Ch. Iftikhar Nazir (~13%), Mr. Masood ur Rehman (~2%), and Ms. Ghazala Ghazni (~2%) (w/o Ch. Iftikhar Nazir – the Group's Chairman). A team of professionals assists the BoD's Chairman and the CEO of the Company.