PACRA Maintains Entity Ratings of Azhar Corporation (Pvt) Limited

The Ratings of Azhar Corporation (Pvt.) Limited (‘Azhar Corporation’ or ‘the Company’) reflect its established market presence, solid operational performance, and demonstrated ability to diversify and innovate within its chosen business segment in a competitive environment. The Company benefit from the strong brand equity of its flagship brand Gai, with significant market share spanning across urban and sub urban areas. The brand strength is pivotal to the ratings. The Company derives its revenue from the local sales. Its product portfolio includes a range of detergent products, including Gai Power Wash and Xtra Neat. The Company has presence in branded Vegetable Ghee/Edible Oil segment, with- Gai Banaspati and Gai Cooking Oil. Product diversification has been further reinforced with the introduction of Hoor beauty soap, strengthening its footprint in the personal care category.
Industry dynamics present a mixed risk-reward profile. For the edible oil sector, high import dependency and thin margins expose refiners to global price volatility and currency fluctuations, while opportunities exist in increasing local oilseed production and value-added product lines to improve margins. In the soap and detergent segment, intense competition from over 600 domestic units, coupled with the presence of imported toilet and liquid soaps, poses pricing pressure; however, strong brand positioning, organized sector efficiencies, and expanding suburban distribution channels offer growth and profitability potential for established players.
The topline remained primarily driven by the laundry soap division, underpinned by the Company’s extensive dealer network across suburban markets, generating PKR 5,822 million in sales. The vegetable ghee and cooking oil segment contributed PKR 1,673 million, taking total net sales to PKR 7,496 million in FY25, reflecting a modest growth of 1.5% YoY. At the bottom line, the Company reported a profit after tax of PKR 101 million in FY25 (FY24: PKR 58 million), registering a strong 74% YoY increase, supported by improved cost efficiencies and a stable operating environment. Margins have remained broadly stable, while borrowing costs have declined following reductions in the SBP policy rate. The Company’s financial profile remains sound, underpinned by a moderately leveraged capital structure comprised almost entirely of short-term borrowings, which account for 97% of total debt and are utilized primarily for working capital needs, supported by an equity base of PKR 3,986 million
Ratings depend on management's prudent maintenance of market share and business margins. Volume and margin pressure stemming from high input costs and a fiercely competitive market pose a downside risk to the ratings.

About the Entity
Azhar Corporation (Pvt.) Limited was incorporated in 1979, and principally manufactures Personal, Homecare, and Edible Oil products at an installed capacity of 126,000MT/annum. These include Laundry Soap, Beauty Soap, and Detergent Powders. The Company also manufactures Vegetable Ghee and Cooking Oil at an installed capacity of 45,000MT/annum. Ownership of the Company vests equally with the families of Mr. Azhar Iqbal and Mr. Hassan Munawwar (~ 50% each). The Board is dominated by the Sponsoring family, and includes Mr. Azhar Iqbal and Mr. Hassan Munawwar, Ms. Khadija Azhar and Ms. Zainab Azhar. They are assisted by a team of professionals.