Muhammad Nadeem Sheikh
PACRA Assigns Initial Entity Ratings to Jhulay Lal Parboiled Rice Mill
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.
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.