Jhulay Lal Parboiled Rice Mill (Jhulay Lal or 'the Firm') is a partnership firm established in 2011.

Mr. Gurmukh Das, one of the two sponsors of Jhulay Lal, served as an AVP at Faysal Bank Limited. He resigned from the job and entered into a partnership business with his brother, Mr. Ramesh Kumar, later in 2010. The business was formerly operated by their father Mr. Megho Mal.

Jhulay Lal is a prominent player in the rice processing and sales sector, operating with a strategically positioned infrastructure. The company maintains two key facilities: the first, located in Golarchi, Badin, is dedicated exclusively to paddy processing, while the second, at Port Qasim, Karachi, is equipped to handle both paddy and processed rice, providing enhanced operational flexibility. With a rated processing capacity of 60 metric tons per hour, the Company demonstrates its ability to efficiently manage resources in line with market demand. This utilization level reflects Jhulay Lal’s focus on operational efficiency, capacity optimization, and business continuity, supporting its position as a reliable supplier in the rice value chain.

Mr. Gurmukh Das and Mr. Ramesh Kumar are the two owners of Jhulay Lal having an equal stake in the business.

There is no change in the ownership structure of Jhulay Lal since its inception. The ownership structure is expected to remain stable for a foreseeable period.

Both Mr. Gurmukh Das and Mr. Ramesh Kumar bring significant industry experience to Jhulay Lal. Mr. Gurmukh Das has developed a deep understanding of the export market, overseeing operations across approximately 11 countries, which strengthens the company’s international presence and market strategy. Mr. Ramesh Kumar, on the other hand, is responsible for the management and operational oversight of Jhulay Lal’s plant facilities, ensuring efficient production and smooth day-to-day operations. Together, their complementary expertise supports both the Firm’s strategic growth and operational excellence.

The owners of Jhulay Lal hold diversified investments, including CNG stations, agricultural land, and real estate across multiple cities, which generate healthy cash flow streams. Their financial capacity and demonstrated willingness to provide support to the business when required are considered adequate, reinforcing confidence in the company’s ability to manage liquidity needs and sustain operations during periods of financial stress.

As a partnership firm, Jhulay Lal lacks a formal governance structure, which poses a notable risk to the long-term sustainability of the business. The absence of a structured governance framework limits independent oversight and formalized decision-making processes, potentially affecting transparency, accountability, and strategic risk management.

The owners of Jhulay Lal are seasoned professionals with decades of experience in the rice processing and trading industry, bringing extensive knowledge, industry insight, and proven operational expertise to the business.

Jhulay Lal does not have any board committees, which limits structured oversight and specialized decision-making. The establishment of such committees is considered essential for strengthening the overall governance framework, enhancing accountability, and supporting more effective strategic and operational management.

Jhulay Lal's external auditors are M Akhtar & Co Chartered Accountants. Neither does the Audit firm satisfy the QCR ratings nor it has a listing in the State Bank of Pakistan’s Panel of Auditors.

Jhulay Lal maintains a lean organizational structure, with the sponsors directly engaged in daily management. Mr. Megho Mal also contributes actively at the plant level, despite not holding a formal position within the organizational hierarchy. While this hands-on involvement ensures operational continuity, it also underscores the company’s dependence on a small management team for critical decision-making and day-to-day operations.

Both directors are supported by Mr. Fakhrudin Majal, serving as Head of Accounts, and Mr. Shakeel Ahmed, serving as Head of Exports, providing functional oversight in their respective areas and assisting in the management of financial and export operations.

Currently, Jhulay Lal does not have any formal management committees, with all key operational and strategic decisions being addressed directly by the partners. This approach centralizes decision-making but limits structured oversight and formalized delegation of responsibilities.

Jhulay Lal relies on internally developed software as its primary tool for the preparation of financial accounts. While this allows for tailored functionality, it may also pose risks related to system reliability, scalability, and auditability compared to standardized accounting solutions.

The Firm does not have an internal audit function, which limits independent review of internal controls, risk management, and compliance processes, potentially affecting operational oversight and governance effectiveness.

Pakistan’s rice sector reflects stable supply but significant export-side stress, indicating a demand-driven downturn rather than production constraints. Output held steady at ~9.7mln MT despite lower cultivated area (~3.6mln Ha), supported by improved yields (~2.7 MT/Ha), with non-basmati production at a five-year high and basmati slightly lower YoY. However, exports fell sharply during 8MFY26 to ~2.8mln MT (USD ~1.5bln) from ~4.2mln MT (USD ~2.5bln), driven primarily by intensified competition following India’s re-entry into global markets, particularly impacting price-sensitive non-basmati segments. While basmati prices remained relatively resilient (~USD 1,028/MT), non-basmati saw margin pressure (~USD 369/MT), with recent price support likely driven by domestic inventory buildup rather than demand. Export weakness has been exacerbated by geopolitical disruptions, including Middle East shipping constraints and the Pakistan-Afghanistan border closure, raising freight costs and limiting access to key markets. With domestic consumption (~3.9mln MT) heavily skewed toward basmati, excess non-basmati supply has accumulated as inventory, leaving the FY26 outlook dependent on external demand recovery, policy adjustments, and easing geopolitical pressures.

The firm holds a strong position in the domestic rice market and is actively focused on expanding its presence in international markets, demonstrating a commitment to strengthening its export footprint and capturing growth opportunities abroad.

Jhulay Lal’s revenue profile reflects a transition from the exceptional growth observed in FY24 toward a more normalized, albeit increasingly concentrated, operating structure in FY25. Total revenues declined to ~PKR 22.46 billion in FY25 from ~PKR 29.33 billion in FY24, primarily attributable to the normalization of demand following the extraordinary performance recorded in the preceding year. Notwithstanding the decline in overall turnover, the Firm’s revenue base became materially more export-oriented, with export sales increasing to ~PKR 19.37 billion in FY25 compared to ~PKR 18.53 billion in FY24, thereby elevating dependence on international markets. The FY25 revenue mix also reflected limited diversification through ancillary agri-commodity segments, with soya bean products contributing ~13% of total revenues and local byproducts accounting for ~2%. While these segments provide modest diversification benefits, the overall business profile remains predominantly concentrated in export-driven operations. Accordingly, the FY25 revenue structure indicates heightened exposure to international demand dynamics, pricing volatility, and external market risks, thereby underscoring the importance of sustained product and market diversification to support revenue stability and preserve credit quality.

Jhulay Lal’s financial performance in FY25 reflects a notable weakening in profitability metrics relative to the preceding year. The gross profit margin declined to ~5.5% from ~9.3% in FY24, primarily attributable to elevated cost pressures, thereby reducing the company’s buffer against input cost volatility. Similarly, the operating profit margin contracted to ~5.2% from ~8.9%, indicating operational pressures that may adversely affect the sustainability of future cash flows. The PBIT margin also weakened to ~5.3% compared to ~9.0% in FY24, reflecting a comparatively reduced capacity to absorb additional costs prior to servicing financing obligations. Consequently, the net profit margin declined materially to ~1.0% from ~5.0%, highlighting significant pressure on overall profitability and indicating a comparatively constrained capacity to support liquidity generation and debt-servicing requirements.

In FY25, Jhulay Lal’s strategic initiatives reflect a proactive effort to diversify and strengthen its export-led revenue base, as evidenced by shipments to a broad set of destinations including China, Colombo (Sri Lanka), Dakar (Senegal), Indonesia, Lomé (Togo), Toamasina (Madagascar), Port Klang (Malaysia), Kenya, and Tema (Ghana). This footprint underscores the company’s continued emphasis on deepening penetration across African markets while simultaneously expanding its reach in Asia. The establishment of a dedicated distribution entity, Monarda, in Hong Kong further enhances logistical capabilities and supports access to Asian demand centers. In parallel, Jhulay Lal’s focus on exporting value-added by-products aligns with its objective of improving revenue mix through diversification, while the exploration of maize trading opportunities in Asian markets signals an intent to broaden its agricultural portfolio beyond rice. Collectively, these initiatives highlight a strategic commitment to revenue diversification and market expansion, which could support financial stability and strengthen the company’s credit profile, subject to effective execution and prudent management of operational and competitive risks.

Jhulay Lal’s working capital requirements primarily stem from the financing needs associated with inventories and trade receivables, which are supported through a combination of internally generated cash flows and short-term borrowings, particularly under the Export Refinancing Facility (ERF). During FY25, the company exhibited a marked deterioration in its working capital profile, with net working capital days increasing significantly to ~129 days from ~64 days in FY24. This increase was principally driven by a substantial rise in inventory holding days to ~70 days from ~37 days, indicating slower inventory turnover and potentially reflecting weaker demand absorption, inventory build-up, or procurement inefficiencies. In parallel, receivable days increased materially to ~59 days from ~29 days, suggesting comparatively slower collections and a higher amount of capital tied up in trade debtors. Trade payable days remained largely unchanged at ~1 day, limiting the company’s ability to offset the increased cash conversion cycle through supplier credit. Consequently, the extended working capital cycle has intensified pressure on liquidity and heightened reliance on short-term borrowings to finance operational requirements, thereby increasing exposure to refinancing risk and constraining financial flexibility.

During FY25, Jhulay Lal’s financial coverage indicators reflected a notable weakening in the Firm’s ability to meet its financing obligations amid declining profitability and cash flow generation. The EBITDA-to-finance cost ratio declined to ~2.2x from ~3.7x in FY24, indicating reduced operating earnings relative to finance costs and a comparatively lower cushion available for debt servicing. Similarly, the FCFO-to-finance cost ratio weakened to ~1.7x from ~3.1x, signaling diminished cash flow coverage of financing expenses and reduced internal liquidity support. Furthermore, FCFO recorded a negative growth rate of ~53.6% during FY25, compared to positive growth of ~149.7% in the preceding year, reflecting the combined impact of lower profitability and elevated working capital requirements. The overall deterioration in coverage metrics highlights increasing pressure on the Firm’s financial profile and underscores the importance of improving operating cash flow generation, enhancing working capital efficiency, and containing finance costs to support liquidity and maintain credit stability.

The Firm’s capital structure remains highly leveraged, with leverage increasing to ~51.1% in FY25 from ~47.4% in FY24, reflecting continued dependence on debt-funded working capital support. Partners’ capital stood at ~PKR 5.2 billion, while total short-term borrowings amounted to ~PKR 5.4 billion. The borrowing profile remains entirely short-term in nature, comprising ~100% of total debt, consistent with historical trends and indicative of the Firm’s ongoing reliance on short-term financing facilities to support operational and trade-related requirements. The Firm has continued to benefit from concessionary financing schemes offered by the State Bank of Pakistan, which have helped moderate borrowing costs and partially alleviate pressure on finance expenses. However, the persistently high reliance on short-term debt exposes the Firm to elevated refinancing and liquidity risks, particularly amid the elongated working capital cycle observed in FY25. Moreover, any reduction, repricing, or withdrawal of concessionary financing facilities could materially increase funding costs, constrain financial flexibility, and adversely affect the Firm’s debt-servicing capacity.