PACRA Maintains the Entity Ratings of Jhulay Lal Parboiled Rice Mill

The ratings assigned to Jhulay Lal Parboiled Rice Mill ("Jhulay Lal" or "the Firm") reflect its established presence in Pakistan's rice processing and export industry, a sector that remains a cornerstone of the country's agricultural export economy, contributing ~10.5% of total export earnings in FY25. Total rice exports reached ~5.8 million metric tons during FY25, with non-basmati varieties comprising over 85% of volumes and basmati exports holding steady at ~0.8 million metric tons. Nonetheless, intensifying competition from regional and international exporters has exerted sustained downward pressure on global rice prices, compressing margins across the sector. The Firm benefits from experienced sponsors, strategically located processing facilities in Golarchi, Badin, and Port Qasim (Karachi), and a processing capacity of approximately 60 MT/hour, supported by a diversified export base spanning destinations including China, Sri Lanka, Senegal, Indonesia, Malaysia, Kenya, and Ghana.
Business profile strengths are augmented by the Firm's ongoing diversification into soybean products, agricultural by-products, and broader agri-commodity trading, which is expected to widen revenue streams and improve long-term resilience. Continued access to concessionary financing facilities provides additional support to liquidity management and helps contain financing costs, contributing to a more sustainable operating profile.
Financial performance moderated in FY25, reflecting a normalization in demand following an exceptionally strong FY24. Revenue declined to ~PKR 22.46 billion from ~PKR 29.33 billion in the prior year, while gross profit margin contracted to ~5.5% from ~9.3%, amid persistent cost pressures and a less favorable operating environment. The working capital cycle also lengthened, driven by elevated inventory and receivable days, leading to greater reliance on short-term borrowings. Nonetheless, the Firm's strategic focus on broadening its export reach and diversifying its product portfolio provides a measure of support to the overall credit profile.
The rating remains sensitive to improvement in profitability, operating cash flows, and working capital management. Sustained diversification in revenue streams and export markets, along with reduction in reliance on short-term borrowings, will support rating stability. Conversely, further weakening in liquidity, coverage indicators, or withdrawal of concessionary financing support may negatively impact the ratings.

About the Entity
Jhulay Lal Parboiled Rice Mill (“Jhulay Lal” or “the Firm”) is a partnership firm established in 2011 engaged in rice processing, trading, and exports. The Firm is equally owned by Mr. Gurmukh Das and Mr. Ramesh Kumar and originates from a family with longstanding involvement in the rice trade. It operates processing facilities at Golarchi, Badin and Port Qasim, Karachi, with a combined capacity of approximately 60 MT/hour and primarily focuses on export-oriented rice operations, alongside gradual diversification into allied agricultural commodities.