Jhulay Lal Parboiled Rice Mills (Jhulay Lal or 'the business') 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 achieved a utilization rate of ~57% during FY24, demonstrating 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 company’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 A.G. HABIB & CO. 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 business 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

The rice industry in Pakistan remains an important agricultural and export sector, with rice contributing ~10.5% of the country’s total export earnings in FY25. Total rice exports were ~5.8 million metric tons in FY25, slightly lower than the previous year, with non basmati varieties, still the dominant segment, accounting for over 85% of export volume and facing downward price pressure, while basmati exports remained steady near 0.8 million metric tons despite weaker average prices. The industry’s dynamics are shaped by external demand trends, currency effects, and production variability, alongside structural challenges such as rising input costs and climate risks, which together influence sector performance and future growth prospects.

The business 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 exceptional growth in FY24 to a more normalized yet increasingly concentrated structure in FY25. In FY24, the company reported total revenue of ~PKR 35,023 million, supported by favorable market conditions, with export sales of ~PKR 19.23 billion (54.9%) and local sales of ~PKR 15.80 billion (45.1%), while the product mix remained heavily skewed toward IRRI-6 non-basmati rice (~80%) and basmati rice (~20%). In contrast, FY25 revenues declined to ~PKR 24,044 million, reflecting normalization in demand; however, the revenue mix became significantly more export-dependent, with exports contributing ~PKR 20.57 billion (~86%). FY25 revenues also include limited diversification through ancillary agri-commodity segments, with soya bean products contributing ~PKR 3.03 billion (~13%) and local byproducts accounting for ~2% of total revenue. Overall, while FY24 performance was driven by extraordinary volume growth, FY25 reflects a more concentrated, export-oriented revenue structure, increasing exposure to international market volatility and highlighting the need for sustained diversification to support revenue stability and credit quality.

Jhulay Lal’s financial performance for FY24 indicates a notable decline in profitability, warranting close monitoring. The gross profit margin contracted to ~5.7% YoY, down from ~12.0% YoY, primarily due to heightened cost pressures. This reduction in gross margin signals a diminished buffer against cost volatility. Furthermore, the operating profit margin fell to ~5.2% from ~9.7%, reflecting operational challenges that could impact future cash flows. The PBIT margin also decreased to ~5.3% YoY from ~10.5% YoY, suggesting a constrained capacity to absorb additional costs before interest obligations. The decline in net profit margin to ~2.6% YoY from ~3.1% YoY further underscores the strain on overall profitability, potentially impacting liquidity and debt-servicing capacity.

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 arise primarily from the need to finance inventories and trade receivables, for which the company depends on a mix of internal cash flows and short-term borrowings, notably the Export Refinancing Facility (ERF). In FY24, Jhulay Lal achieved a substantial reduction in net working capital days to approximately 54 days, down from 269 days in the prior period. This improvement is largely attributed to a significantly shortened inventory holding period, which decreased to 31 days from 123 days, and a streamlined receivables cycle, reduced to 24 days from 148 days. Despite these positive trends in working capital efficiency, the lack of trade payables leverage (remaining at 0 days, previously 2 days) may limit the company's flexibility in managing cash flows through supplier financing. Nevertheless, the current working capital structure suggests ample capacity for short-term borrowing if needed, with a leaner balance between cash inflows and outflows. However, maintaining this level of efficiency will be crucial to preserving creditworthiness and managing any potential strains on cash flow amid market volatility.

During FY24, Jhulay Lal's financial coverage ratios indicate some strain in its ability to meet financial obligations. The EBITDA-to-finance cost ratio has declined to ~1.4x from ~2.7x, reflecting a decrease in the company’s operating profitability relative to its interest expenses. Similarly, the FCFO-to-finance cost ratio has dropped to ~1.4x from ~2.6x, signaling weakened cash flow coverage for finance costs. This reduction in coverage ratios highlights increased financial risk, particularly in a competitive environment . The company's FCFO growth for the period stands at ~16.1%, up from ~11.8%. However, despite this growth in operating cash flow, the core coverage ratios have not kept pace due to rising finance costs. These declining coverage ratios suggest potential vulnerabilities in Jhulay Lal's financial structure, underscoring the importance of improved cash flow management and reducing finance costs to stabilize its credit profile.

The company’s capital structure remains highly leveraged, with leverage recorded at ~49.2% in FY24. The borrowing profile is entirely short-term in nature, comprising ~100% of total debt, consistent with prior patterns, underscoring continued dependence on working capital financing. In FY25, the company has utilised ~PKR 2.4 billion of its total available credit lines of ~PKR 7.3 billion from various banks, indicating adequate headroom under existing facilities to support operations. Moreover, the company has benefited from the State Bank of Pakistan’s concessionary financing rates, which have helped contain borrowing costs and provided some relief on interest expenses. Nevertheless, the sustained reliance on short-term debt, despite available credit headroom, could constrain financial flexibility and heighten liquidity risk, particularly if concessional financing schemes are reduced or withdrawn in the future.