PACRA Maintains Entity Ratings of Khadija Edible Oil Refinery (Pvt.) Limited

The ratings reflect Khadija Edible Oil Refinery (Pvt.) Limited’s or ("the Company") established market presence and its strategic association with Waheed Group of Companies ("the Group"). The Group has established a leading position in the edible oil and ghee sector, comprising its specific markets. There are five principal operating companies, in this group: Waheed Hafeez Ghee Industries (Pvt.) Ltd., Khadija Edible Oil Refinery (Pvt.) Ltd., Neelum Oil& Ghee Industries (Pvt.) Ltd., AK Oil and Ghee Industry (Pvt) Ltd. and Lal Oil & Ghee Mills (Pvt.) Ltd, with a combined installed production capacity exceeding 850,000 tons per annum, providing meaningful operational synergies and scale advantages.
During FY25, the Company sustained its operational profile amid a challenging and volatile commodity environment characterized by fluctuations in international edible oil prices and exchange rate pressures. The Company reported net revenue of PKR 28,638 million during FY25 (FY24: PKR 27,512 million), reflecting growth of approximately 4.1% YoY, supported by stable demand dynamics and the strength of its established distribution network. This performance is supported by the sustained brand equity of the Company's flagship products, most notably Fauji Supreme, which remains the primary revenue driver, followed by other regional brands like Fauji Kohinoor, Zeenat, Islamabad, Perlli, and Phool. The Company continued to benefit from the strong market recognition of its product portfolio and long-standing customer relationships across its operating regions. Profitability indicators depicted notable improvement during the year, supported by disciplined cost controls, operational efficiencies, and relative stabilization in input procurement costs, with the gross margin expanding to 8.7% (FY24: 5.4%) and the net profit margin rising to 4.7% (FY24: 1.6%). The Company’s financial risk profile remains well-managed, underpinned by adequate working capital management, a conservative capital structure, and continued sponsor support through the Group network. Total borrowings stood at PKR 2,011 million as of FY25 (FY24: PKR 2,460 million), comprising predominantly short-term facilities utilized for working capital and import financing. The leverage ratio stood at 32.7% (FY24: 46.7%), primarily to support expanded import volumes rather than any structural increase in financial risk. EBITDA strengthened to PKR 2,291 million (FY24: PKR 1,313 million), while finance costs remained minimal, reinforcing the Company's strong debt-servicing capacity. The Company continues to benefit from a centralized finance function that ensures rigorous oversight across Group entities.
Looking ahead, the ratings remain sensitive to the Company's ability to sustain its market share and margins in a volatile commodity environment. Brand reputation and customer retention support the ratings. However, strategic backing from the Waheed Group and the prospective institutionalization of board committees to bolster governance remain pivotal credit factors.

About the Entity
Khadija Edible Oil Refinery (Pvt.) Limited was incorporated in Dec-2005 as a Private Limited Company under the Companies Ordinance 1984. The Company is primarily engaged in the process of refining crude palm oil; producing and selling cooking oil/ghee along with shortening. The Company’s majority ownership resides with group company, Waheed Hafeez Ghee Industries (Pvt.) Limited (~87%). The remaining shareholding resides with Mr. Abdul Waheed (~13%). The Company is headed by Mr. Abdul Waheed, the CEO. He is ably supported by a team of experienced professionals.