Asif Rice Mills

RATING REPORT | Apr-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
17-Apr-26 BBB+ A2 Stable Maintain -
18-Apr-25 BBB+ A2 Stable Maintain -
19-Apr-24 BBB+ A2 Stable Maintain -
20-Apr-23 BBB+ A2 Stable Maintain -
22-Apr-22 BBB+ A2 Stable Initial -
About the Entity

Asif Rice Mills (‘Asif Rice’ or ‘the Business’) was established in 2006 as an Association of Persons (AoP). Ownership of the Business is concentrated within the family of Mr. Mumtaz Ali, with Mr. Asif Ali Shaikh holding approximately 34% and Mr. Hanif Shaikh and Mr. Kashif Mumtaz each holding approximately 33%. The Business is principally engaged in the processing and export of semi-processed non-basmati rice, along with limited volumes of basmati rice, to markets across China, Far East Asia, Europe, and Africa. Current installed processing capacity stands at 90MT per hour. The Business is led by Mr. Asif Ali Shaikh as Chief Executive Officer, while Mr. Kashif Mumtaz and Mr. Hanif Shaikh serve as Directors of Sales and Procurement, respectively.

Rating Rationale

The ratings for Asif Rice Mills (the Business) continue to reflect its established foothold in the non-basmati rice export segment, supported by a diversified geographic footprint and significant processing capacity. Strategically, the Business has successfully expanded its product portfolio into the sesame seeds segment, a move that provides a crucial buffer against the concentration risks inherent in a single-commodity model. The Rice industry, a cornerstone of Pakistan’s economy contributing approximately 10.5% to total export proceeds, witnessed a 14.7% year-on-year decline in export earnings to USD 3.35 billion in FY25, following a correction from the previous year's peak. In line with this sectoral moderation and softening international demand, Asif Rice Mills recorded a consolidation in net revenues to PKR 58,886mln (FY24: PKR 64,362mln). Despite this contraction, the financial risk profile remains stable, characterized by conservative leverage and improved debt service coverage. However, the bottom line felt the subtle weight of an increased taxation costs, while gross margins were pressured to 8.3% (FY24: 11.8%) by elevated raw material costs.

Key Rating Drivers

As the industry faces a period of pricing and volume stabilization, the Business’s ability to maintain its market share is closely tied to its operational efficiency. While working capital is currently supported by internally generated cash flows, sustaining business volumes amidst local economic challenges remains the primary focus. Meanwhile, keeping up with a stable financial risk profile, particularly debt servicing capacity, remains imperative for ratings.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Asif Rice Mills


Rating Analysis

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Profile
Legal Structure

Asif Rice Mills (‘Asif Rice’ or ‘the Business’) was incorporated in 2006 as an Association of Persons (AoP).


Background

Mr. Mumtaz Ali joined his family business in 1960s and laid the foundations for Asif Rice Mills by expanding the processing capacity. Capacity enhancement and installation of new machinery including rice husking machines and parboiling machines over the years led to the prominence of the Business in the rice exporter's segment of the country.


Operations

Asif Rice is primarily engaged in processing semi-processed variants of non-basmati rice and limited quantities of basmati rice and exporting it to China, Fareast Asia, Europe, and Africa. Asif Rice, currently, is one of the leading rice exporters of the country, and having processing capacity of 90MT per hour. The Business has also ventured into exporting maize, which is in its initial gestation phases.


Ownership
Ownership Structure

Major ownership of the Business resides with the sons of Mr. Mumtaz Ali. Mr. Asif Ali Shaikh holds ~34% shareholding, while Mr. Hanif Shaikh and Mr. Kashif Mumtaz hold ~33% each. Stability The Business is completely owned.


Stability

The Business is completely owned by the sponsoring family and the structure is seen as stable.


Business Acumen

Mr. Asif Ali Shaikh and his family have been involved in the rice export business for over 3 decades and have witnessed multiple business cycles.


Financial Strength

The sponsors hold sufficient net worth to support the Business in times of distress.


Governance
Board Structure

The Business, being an AoP, is currently governed by three Directors. However, formal structure is not in place.


Members’ Profile

Mr. Asif Ali Shaikh is the CEO; while the other sponsoring individuals, Mr. Kashif Mumtaz holds an overall experience of a decade, and Mr. Hanif Shaikh holds an overall experience of almost two decades, serve as Directors of Sales and Procurement, respectively.


Board Effectiveness

Being an AoP, a formal Board structure is not present in Asif Rice


Financial Transparency

The external auditors of the Company, Naeem & Co. Chartered Accountants, have expressed an unqualified opinion on the financial statements of the Company for the year ended Jun-24. The firm is QCR rated but not in SBP’s panel of auditors


Management
Organizational Structure

The Business has a linear organizational structure and operates mainly through Production, Sales, Procurement, and Finance functions. All functional heads reports to the CEO, who then makes pertinent decisions.


Management Team

Mr. Asif Ali, the CEO, has been associated with the Business since inception and has over two decades of experience in rice, commodity trading, and real estate segments.


Effectiveness

There are no management committees in place. Management meets on need basis to ensure efficiency of the Business’s operations.


MIS

The Business has recently implemented an ERP system for reporting purposes


Control Environment

The Business has a formal internal audit function that helps to ensure compliance with the policies and procedures


Business Risk
Industry Dynamics

The rice sector, a significant contributor to Pakistan's agricultural economy, representing approximately 3.5% of agricultural value addition and 0.7% of the nation's Gross Domestic Product (GDP), experienced a substantial surge in production during the fiscal year 2024 (FY24). This surge, coupled with heightened global demand and a temporary export ban imposed by India, propelled a remarkable 35% increase in rice production. Consequently, basmati rice exports experienced a significant boost, soaring from $650 million to $876 million in FY24. Whereas non - basmati exports surged from $ 1,498mln to $3,954mln. KK’s contribution to these exports was 155,722 metric tons, generating $ 85 million in revenue.


Relative Position

The Business is one of the leading players in the country’s rice exporters market.


Revenues

This Business is a major player in Pakistan's rice export market, focusing on selling rice to international buyers in diverse regions. Their business model relies heavily on exporting non-basmati rice (like IRRI-6 and PK-386), which makes up the bulk of their sales (80%), with basmati rice (Kainat 1121) contributing the remaining 20%. They deliver their products to countries in China, Far-East Asia, Europe, and Africa, showcasing a wide international reach.  The Business recorded a moderation in net revenues to PKR 58,886mln in FY25 (FY24: PKR 64,362mln), reflective of a deliberate consolidation in export volumes amid softening international demand and competitive pricing pressures.


Margins

Despite substantial revenue growth in FY25, the Business experienced a contraction in profitability margins. Gross profit margins decreased to 8.3% from 11.8% in FY24, primarily due to the declining sales volume. Similarly, operating profit margins declined to 2.9% from 7.3%, reflecting the impact of the higher operating expenses. Furthermore, net profit margins fell to 2.0% from 4.6%. Going forward, the margins of the Business is expected to improve. 



Sustainability

To further diversify our revenue streams and broaden our market appeal, the Business strategically expanded its product portfolio this year to include sesame seeds.


Financial Risk
Working capital

The Business's working capital management, facilitated by the short-term Export Refinancing Facility demonstrated significant efficiency improvements in FY25. Inventory days decreased sharply to 36 from 59, indicating faster inventory turnover. Similarly, trade receivable days reduced to 22 from 37, suggesting improved collection efficiency. Consequently, gross working capital days fell to 22 from 37. Notably, trade payable days extended to 17 from 8, suggesting better negotiation with suppliers. The combined effect of these changes resulted in a substantial reduction in net working capital days to 5 from 29, signifying a more efficient utilization of short-term assets and liabilities and a reduced operational cash conversion cycle.


Coverages

The Business's financial health, particularly its ability to service debt, has significantly improved in FY25. The interest coverage ratio, a key indicator of this capacity, rose to 8.7x from 6.1x in FY24. This substantial increase is driven by the sizable decline in the finance cost that clocked at PKR 112mln (FY24: PKR 703mln). Whereas, the Company's FCFO witnessed a dip and stood at PKR 955mln (FY24: 4,274mln). 


Capitalization

During FY25, total debt increased from PKR 1,616mln in FY24 to PKR 1,741mln in FY25. Notably, the Business's reliance on the short-term Export Refinancing Facility-Part II (ERF) has increased proportionally, now constituting approximately 92% of the total debt portfolio. This indicates a strategic shift towards leveraging short-term financing mechanisms, likely to support working capital needs related to export activities. While the overall debt reduction strengthens the Business's financial position, the increased concentration in short-term ERF introduces a higher degree of short-term liquidity risk that warrants careful monitoring. The equity base clocked at 11,456mln (FY24: PKR 10,264mln), indicating a low leveraged capital structure with leveraging at 13.2 %. 
 
 

Apr-26

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Asif Rice Mills


Financial Summary

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(PKR mln)


 Jun-25
12M		 Jun-24
12M		 Jun-23
12M
A. BALANCE SHEET
1. Non-Current Assets 5,219 5,221 5,249
2. Investments 6,537 0 0
3. Related Party Exposure 0 0 0
4. Current Assets 9,558 17,827 7,307
a. Inventories 566 8,508 4,221
b. Trade Receivables 5,614 5,947 1,729
5. Total Assets 21,315 23,047 12,556
6. Current Liabilities 8,117 11,167 873
a. Trade Payables 7,503 5,650 212
7. Borrowings 1,741 1,616 4,395
8. Related Party Exposure 0 0 0
9. Non-Current Liabilities 0 0 0
10. Net Assets 11,456 10,264 7,288
11. Shareholders' Equity 11,456 10,264 7,288
B. INCOME STATEMENT
1. Sales 58,886 64,362 23,412
a. Cost of Good Sold (53,972) (56,737) (19,071)
2. Gross Profit 4,914 7,626 4,341
a. Operating Expenses (3,214) (2,951) (2,061)
3. Operating Profit 1,700 4,674 2,279
a. Non Operating Income or (Expense) 806 305 34
4. Profit or (Loss) before Interest and Tax 2,507 4,980 2,314
a. Total Finance Cost (112) (703) (690)
b. Taxation (1,203) (1,288) (199)
6. Net Income Or (Loss) 1,192 2,988 1,425
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 955 4,274 2,195
b. Net Cash from Operating Activities before Working Capital Changes 844 3,572 1,505
c. Changes in Working Capital 4,088 383 (67)
1. Net Cash provided by Operating Activities 4,932 3,954 1,439
2. Net Cash (Used in) or Available From Investing Activities (6,623) (48) (939)
3. Net Cash (Used in) or Available From Financing Activities 125 (2,791) (974)
4. Net Cash generated or (Used) during the period (1,565) 1,115 (474)
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) -8.5% 174.9% -19.2%
b. Gross Profit Margin 8.3% 11.8% 18.5%
c. Net Profit Margin 2.0% 4.6% 6.1%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 8.6% 7.2% 9.1%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 11.0% 34.1% 19.6%
2. Working Capital Management
a. Gross Working Capital (Average Days) 64 58 93
b. Net Working Capital (Average Days) 23 41 89
c. Current Ratio (Current Assets / Current Liabilities) 1.2 1.6 8.4
3. Coverages
a. EBITDA / Finance Cost 23.5 7.3 3.5
b. FCFO / Finance Cost+CMLTB+Excess STB 8.7 6.1 3.2
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.2 0.1 0.3
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 13.2% 13.6% 37.6%
b. Interest or Markup Payable (Days) 0.0 0.0 0.0
c. Entity Average Borrowing Rate 6.6% 23.1% 15.6%

Apr-26

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Asif Rice Mills


Rating Scale

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Apr-26

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Asif Rice Mills


regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
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