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The Pakistan Credit Rating Agency Limited
Press Release

Date
18-Feb-19

Analyst
Muhammad Nadeem Sheikh
nadeem.sheikh@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Initial Entity Ratings to Jhulay Lal Parboiled Rice Mill

Rating Type Entity
Current
(18-Feb-19)
Action Initial
Long Term BBB
Short Term A2
Outlook Stable
Rating Watch -

The ratings reflect Jhulay Lal's emerging position in the rice export market. Jhulay Lal (JL) has expanded its capacity over the last couple of years; the two new lines have been commissioned. This has strengthened the business profile of Jhulay Lal. The growth in topline and profitability is widened. The equity been due to internal generation of funds has also improved. Jhulay Lal has a good track record of building sales volume. The sponsors have a good understanding of the business. The second generation is playing a vital role in the growth of Jhulay Lal. The CEO is dynamic and has built expertise in the international trade, by virtue of his business in Hong Kong. The challenge is the cyclical nature of the rice business. The management is concentrated in family's hand. The corporate structure is lacking. The working capital cycles is long, creating need for short term borrowing over a relatively a longer horizon.

The ratings are dependent on sustained business and financial profile of the rated entity. Any dilution in business volume and profits would be considered negative. The financial disciplines including coverages need to be upheld.

About the Entity
Jhulay Lal Parboiled Rice Mills is a partnership firm. There are two partners, having equal shares, Mr. Gurmukh Das and Mr. Ramesh Kumar are the partners of the Jhulay Lal. Mr. Gurmukh Das has been in the business for the past ~7 years. He is an MBA in Marketing from SZABIST University. Mr. Das was formerly working in Faysal Bank before being involved in the Rice Business and now is the main face of Jhulay Lal. Syed Hassan & Co. Chartered Accountants are the auditor for Jhulay Lal.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.