Mumtaz Feeds & Allied Industries (Pvt.) Limited

CREDIT RATING REPORT | Oct-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
10-Oct-25 BBB A2 Stable Maintain -
11-Oct-24 BBB A2 Stable Upgrade -
21-Oct-23 BBB- A2 Positive Maintain -
22-Oct-22 BBB- A2 Positive Maintain -
22-Oct-21 BBB- A2 Positive Maintain -
About the Entity

Mumtaz Feeds & Allied Industries (Pvt.) Limited was incorporated as a Private Limited Company in 2016, with commercial operations commencing in 2017. The Company primarily engages in the production and sale of broiler and layer feed in various formulations. The installed annual production capacity stands at 144,000 MT (40 MT per hour). Major shareholding in Mumtaz Feeds resides with Mr. Aamir Ali Khan (~35%), followed by Mr. Muhammad Umer (~20%). Mr. Nasir Malik and his brother Mr. Yasir Malik each hold a 17.5% stake. Mr. Aamir Ali Khan, the CEO and Chairman of the Board, brings over two decades of industry experience, which continues to play a pivotal role in the Company's operational success.

Rating Rationale

The ratings reflect the growing business profile of Mumtaz Feeds & Allied Industries (Pvt.) Limited (“Mumtaz Feeds” or “the Company”) within the poultry feed sector. The Company is part of the Mumtaz Group, with established presence across the agro-based value chain. Group operations span solvent extraction through Mumtaz Agro Industries and broiler farming through Mumtaz Chick and Mumtaz Protein Farms, which operate Poultry Farms across Southern Punjab. The Group’s forward-looking strategy underscores its ambition to strengthen its integrated business model and capture a larger market share. Expansion initiatives include entry into the consumer goods segment through the planned launch of Mumtaz Soap and diversification into the edible oil and ghee industry under the banner of Mumtaz Oil & Ghee Industries. These ventures are expected to enhance the Group’s revenue diversification, operational synergies, and long-term sustainability. The Company also benefits from the strategic leadership of its sponsors, whose extensive experience and successful business track record contribute to operational resilience and growth. A robust corporate governance framework, reinforced by stringent internal controls and a seasoned management team, underpins the Company’s operations. The sponsors’ strategic vision is evident in the development of a performance-driven corporate culture, enabling the Company to navigate the inherent challenges of the poultry sector effectively.
In FY25, the Company reported revenues of ~PKR 5.8bln, reflecting a decline primarily due to reduced selling prices, imposition of taxes by FBR on unregistered persons, and lower volumetric sales of poultry feed caused by excess supply in the domestic market. Revenue concentration remains notable, with ~50% of sales directed towards associated concerns, Mumtaaz Chicks and Mumtaaz Proteins, while Broiler Control Finisher continues to be the flagship product. The Company remains exposed to inherent feed industry risks emanating from raw material price volatility; however, working capital is effectively managed through extended supplier credit and prudent debtor management. Synergies are also realized by sourcing key inputs, particularly soybean meal, from an associated concern, which further strengthens cost efficiency. The Company maintains a low-leverage capital structure, evidenced by a gearing ratio of ~8.0% in FY25. This is primarily attributable to the management of working capital through internally generated cash flows, reflecting limited reliance on bank financing and aligning with management’s strategic objective of preserving a low-debt profile. The management’s deep understanding of supply chain dynamics underpins efficient procurement practices, enabling consistent production of high-quality feed while keeping costs under control. Mumtaz Feeds should continue diversifying its customer base beyond associated concerns to reduce concentration risk, while sustaining its low-leverage strategy to preserve financial flexibility and resilience against industry volatility.

Key Rating Drivers

The ratings remain dependent on management's ability to capture additional market share, improve margins, and drive profitability. Maintaining strict discipline in working capital management and moderate leveraging is crucial. Any significant deterioration in margins or coverage metrics could negatively impact the ratings.

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

Mumtaz Feeds & Allied Industries (Pvt.) Limited

rating analysis

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Profile
Legal Structure

Mumtaz Feeds and Allied Industries (Pvt.) Ltd (‘the Company’ or ‘Mumtaz Feeds’) incorporated as a private limited company on March 11, 2016


Background

Sponsors have been associated with poultry feed industries for more than fifteen years in different capacities. . In 2016, they collaborated to incorporate Mumtaz Feeds. A year later, the Company started commercial production of poultry feed. The Company changed its name to 'Mumtaz Feeds & Allied Industries (Pvt.) Limited'


Operations

Mumtaz Feed & Allied Industries (Pvt.) Limited (“Mumtaz Feed” or “the Company”) is a key player in the poultry feed manufacturing industry, offering a diversified product portfolio of sixteen variants. The Company operates with an installed capacity of 144,000 MT per annum (40 MT per hour) and achieved a capacity utilization of 35% during FY25. Headquartered in Multan, Mumtaz Feed is part of the Mumtaz Group, which has strategically expanded across the poultry value chain. Forward integration has been achieved through poultry farming operations under the banner of Mumtaz Protein in Southern Punjab, while backward integration is supported through solvent extraction operations. This integrated structure strengthens the Group’s revenue base and enhances business sustainability.


Ownership
Ownership Structure

Major shareholding of Mumtaz Feeds resides with Mr. Aamir Ali Khan (35%), followed by Mr. Muhammad Umer (20%). Mr. Nasir Malik and his brother Mr. Yasir Malik owns an equal stake (17.5%) in the Company . The remaining stake vests with Dr. Muhammad Aslam (10%)


Stability

Ownership of the Company vests among five sponsors with no formal succession plan.


Business Acumen

The sponsors have been part of the poultry industry for more than a decade and are well aware about the industry's business cycles.


Financial Strength

The Company's financial strength is represented through the support of its sponsors and associated entities having vested interest in the poultry feed industry.


Governance
Board Structure

The Company's Board of Directors comprise one Executive Directors and two Non-Executive Directors . Lack of independent oversight signifies a weak governance structure.


Members’ Profile

The Chief Executive Officer, Mr. Aamir Ali Khan has been associated with the sale of poultry feed and trading Soybean meal for more than two decades. Dr. Muhammad Aslam, serving as General Manager – Production, brings 19 years of industry experience, including 9 years with the Group. 


Board Effectiveness

To ensure effectiveness, the Board has formed two sub-committees , Audit & Risk Management and Procurement & Development. During FY25, several BoD and sub-committee meetings were held with high participation . Minutes of these meetings are not formally documented , indicating room for improvement


Financial Transparency

The Company’s external auditors, Waqas & Co. Chartered Accountants, issued an unqualified opinion on the financial statements for the year ended June 2024. The audit for the June 2025 accounts is currently underway. While the firm holds a QCR rating, it is not listed on the State Bank of Pakistan’s panel of auditors.


Management
Organizational Structure

The Company has a horizontal organizational structure which is based on seven main departments, namely , Production, Marketing, Procurement, Head Office, Audit & Tax, Accounts and Imports. All departmental heads report to the CEO.


Management Team

The management comprises experienced individuals with relevant technical know-how . Mumtaz Feed's CEO, Mr . Aamir Ali Khan, has been associated with the sale of poultry feed and trading Soybean meal for more than two decades. Dr. M . Aslam, General Manager Production, holds an M.Sc. (Hons) in animal nutrition . He has an overall experience of more than a decade in poultry feed manufacturing and formulation. General Manager Sales and Logistics also has over 17 years of experience in feed industry. Mr. Bilal(CFO) Possesses 8 years of professional experience, managing the Company’s financial reporting, working capital, and compliance functions.


Effectiveness

There are no management committees in place to monitor management's effectiveness.


MIS

The Company developed an in-house software with three modules - Financial Accounting , Sale Purchase and Software Security - designed to meet the need for accounting and inventory management. Financial statements are prepared on a quarterly basis, while production, sales, receivables, and stock reports are prepared on a weekly and monthly basis


Control Environment

The Company has an established internal audit function that is actively operational and reports directly to the CEO. Furthermore, the Company emphasizes quality control measures and adheres to strict policies to ensure compliance with the regulatory framework of the food authority.


Business Risk
Industry Dynamics

During FY 24-25, poultry feed production reached 7.60mln MT. T otal Poultry Feed Revenue stood at PKR 1064bln. Annually, Table Eggs production is around 13,160mln table Eggs and 1.5mln kilogram Chicken meat.Pakistan’s per capita poultry meat consumption is currently just 6.37 kg per annum—the lowest among developing nations, where the average consumption is around 11 kg per annum.  The sectors market structure is classified as competitive with 215 Poultry Feed Mills that are operating in Pakistan. Poultry Feed is mostly used in Controlled sheds where 90% of the sales are made on credit thus exposing the sector players to credit risk from their customers. Average Price of Chicken is 497per kg at retail level. The poultry feed sector in Pakistan holds strong growth potential, supported by increasing R&D, a rising population with greater purchasing power, and low brand loyalty that allows new players to capture market share. A vast distribution network and modernization of technology further enhance efficiency, competitiveness, and sustainability in the industry.


Relative Position

The Company is a relatively small and emerging player in the poultry feed industry, contributing 144,000 MT annually, which represents a modest share of the total 7.6mln MT feed production in the market. Despite its smaller scale, the Company is gradually building its presence within the highly competitive sector.


Revenues

Since its inception in 2017, the Company has experienced a consistent upward trajectory in sales. However, in FY25, the topline declined to PKR 5.5bln, representing a 48% drop compared to PKR 11bln in FY24. This downturn was mainly attributable to reduced selling prices and the imposition of an additional tax on unregistered persons. In addition, the Company adopted a more stringent credit policy, which further impacted sales volumes. The Broiler Starter Crumbs Special continued to be the Company’s flagship product, contributing approximately 45% of total revenue in FY25.


Margins

During FY25, Mumtaz Feeds & Allied Industries witnessed margin compression, primarily due to declining sales and persistent cost pressures. The gross profit margin contracted to 4.1% (FY24: 5.0%), reflecting elevated raw material costs. Operating profit margin also decreased to 3.0% (FY24: 4.3%), while net profit margin narrowed to 1.9% (FY24: 2.5%). The decline in margins underscores mounting cost-side challenges and highlights the need for operational efficiencies and cost rationalization to sustain future earnings.


Sustainability

The Company’s future strategy reflects a deliberate focus on strengthening its market presence within the competitive poultry feed industry. In response to prevailing market pressures, the Company intends to pursue a balanced pricing strategy while ensuring consistent product quality. By offering high-quality feed at competitive rates, the Company seeks to broaden its customer base and reinforce its position as a reliable supplier in the industry.


Financial Risk
Working capital

The Company’s working capital cycle exhibited inefficiencies in FY25, with inventory days rising sharply to 88 days from 48 days in FY24, largely due to higher raw material holding periods. Trade receivables remained steady at 10 days, reflecting consistent collection practices, while trade payable days improved to 32 days from 24 days, indicating a relatively extended supplier credit period. As a result, the net working capital cycle lengthened to 66 days in FY25 from 30 days in FY24, highlighting greater cash lock-up in operations. This deterioration in the working capital position underscores the need for efficient inventory management and more effective alignment of receivables and payables to support liquidity and operational efficiency.


Coverages

The Company’s cash flow position weakened in FY25, as free cash flow from operations (FCFO) declined sharply to PKR 61mln (FY24: PKR 474mln). Although finance costs decreased to PKR 20mln in FY25 (FY24: PKR 41mln), the interest coverage ratio contracted to 11.6x (FY24: 13.3x), reflecting pressure on operating cash generation. The moderation in cash flow metrics was primarily attributable to reduced operating inflows, which offset the benefits of lower finance costs. While the three-year FCFO growth trend softened and liquidity cover exhibited a marginal decline, the Company continues to demonstrate adequate debt servicing capacity, with EBITDA-to-finance cost and debt payback indicators remaining within comfortable ranges.


Capitalization

The Company’s capital structure remains conservatively leveraged, despite a notable increase in borrowings during FY25. Total borrowings rose to PKR 87mln, resulting in leverage increasing to 8.0% (FY24: 3.5%). The capital mix continues to reflect the Company’s prudent financial policy, with debt maintained at modest levels relative to equity. This conservative stance reinforces financial flexibility, limits exposure to debt-related risks, and supports the Company’s overall credit profile.
 
 

Oct-25

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Mumtaz Feeds & Allied Industries (Pvt.) Limited

financial summary

(PKR mln)

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Jun-25
12M		 Jun-24
12M		 Jun-23
12M
A. BALANCE SHEET
1. Non-Current Assets 465 421 392
2. Investments 0 0 0
3. Related Party Exposure 0 0 0
4. Current Assets 1,611 2,105 1,865
a. Inventories 1,332 1,508 1,466
b. Trade Receivables 112 212 175
5. Total Assets 2,077 2,526 2,257
6. Current Liabilities 316 962 806
a. Trade Payables 271 781 732
7. Borrowings 87 0 19
8. Related Party Exposure 55 55 205
9. Non-Current Liabilities 2 2 2
10. Net Assets 1,618 1,509 1,226
11. Shareholders' Equity 1,618 1,509 1,226
B. INCOME STATEMENT
1. Sales 5,819 11,309 8,260
a. Cost of Good Sold (5,579) (10,746) (7,819)
2. Gross Profit 240 563 441
a. Operating Expenses (65) (74) (70)
3. Operating Profit 175 489 371
a. Non Operating Income or (Expense) 0 0 0
4. Profit or (Loss) before Interest and Tax 175 489 371
a. Total Finance Cost (20) (41) (40)
b. Taxation (45) (166) (62)
6. Net Income Or (Loss) 109 282 269
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 61 474 356
b. Net Cash from Operating Activities before Working Capital Changes 41 433 316
c. Changes in Working Capital (128) (224) 259
1. Net Cash provided by Operating Activities (87) 209 576
2. Net Cash (Used in) or Available From Investing Activities (97) (76) (45)
3. Net Cash (Used in) or Available From Financing Activities 96 (155) (410)
4. Net Cash generated or (Used) during the period (88) (21) 121
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) -48.5% 36.9% 57.8%
b. Gross Profit Margin 4.1% 5.0% 5.3%
c. Net Profit Margin 1.9% 2.5% 3.3%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) -1.1% 2.2% 7.5%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 7.0% 20.7% 23.5%
2. Working Capital Management
a. Gross Working Capital (Average Days) 99 54 73
b. Net Working Capital (Average Days) 66 30 45
c. Current Ratio (Current Assets / Current Liabilities) 5.1 2.2 2.3
3. Coverages
a. EBITDA / Finance Cost 11.6 13.3 10.7
b. FCFO / Finance Cost+CMLTB+Excess STB 3.1 11.7 9.1
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 2.2 0.1 0.7
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 8.0% 3.5% 15.4%
b. Interest or Markup Payable (Days) 0.0 0.0 0.0
c. Entity Average Borrowing Rate 23.5% 13.7% 9.3%

Oct-25

www.pacra.com

Mumtaz Feeds & Allied Industries (Pvt.) Limited

rating scale

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Oct-25

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Mumtaz Feeds & Allied Industries (Pvt.) Limited

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.
  2. Restrictions
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    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
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Oct-25

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