PACRA Maintains the Entity Ratings of Swat Agro Chemicals

The assigned ratings of Swat Agro Chemicals (‘Swat Agro’ or ‘the Business’) derive strength from the sponsor’s extensive experience in the pesticide industry and the Business’s established domestic presence, underpinned by a diversified product portfolio spanning insecticides, fertilizers, micronutrients, fungicides, household products, weedicides, adjuvants and agri-equipment. The ratings draw further support from a strategic collaboration with BASF and the successful operation of the Business’s state-of-the-art SC and EC formulation plant, complemented by ongoing expansion into seed development, packaging and real estate. The Business is currently transitioning from a partnership to a corporate structure through two companies, Swat Agro Chemicals (Pvt.) Ltd (‘SAC Pvt.’) and Altiga Agri Solutions (Pvt.) Ltd (‘Altiga’), with operations being gradually shifted from the AOP to these entities. On the governance front, Swat Agro Chemicals is audited by Dilroze Khan & Co., Chartered Accountants, while SAC Pvt. and Altiga have appointed a QCR-rated auditor. The Business has consistently maintained a sustainable risk profile. Its sales mix is led by fertilizers (~30%), insecticides (~28%) and micronutrients (~25%), followed by household products (~10%), fungicides (~6%) and weedicides (~1%). In FY26, the AOP recorded sales of Rs. 3.08bn (FY25: Rs. 7.12bn), SAC Pvt. Rs. 6.02bn (FY25: Rs. 1.05bn) and Altiga Rs. 2.29bn (FY25: Rs. 1.50bn), taking the Group’s aggregate sales to Rs. 11.39bn (FY25: Rs. 9.67bn). The Business sustained healthy gross margins of ~35% (FY25: ~33%), translating into a net profit of Rs. 634mn (FY25: Rs. 1.07bn). At the Group level, gross margin improved to ~36% (FY25: ~33%), while net profit declined to Rs. 1.03bn (FY25: Rs. 1.19bn), owing to higher operating expenses and corporate taxation at the company level. Working capital requirements are met through a mix of internal cash flows and short-term borrowings, some of which are interchangeable between the AOP and the companies. The capital structure remains adequate, with sound coverage metrics, as the Business carries no long-term debt and its borrowings are entirely working capital in nature.
The ratings depend on Swat Agro’s ability to sustain, and preferably improve, its operational and financial profile, alongside a successful transition to the envisaged corporate structure. Moreover, strengthening the governance framework, enhancing financial transparency and developing effective internal controls remain key to the ratings.

About the Entity
Swat Agro Chemicals (‘Swat Agro’ or ‘the Business’) was established in 1996 as a partnership concern under the Partnership Act, 1932. Ownership rests with three partners: Mr. Barkat Ali Khan holds the major stake (~50%), while the remaining ~50% is held equally by Ms. Fouzia Nazneen and Mr. Muhammad Alam Khan. Mr. Barkat Ali Khan leads the Business as CEO and is supported by an experienced management team.