PACRA Assigns Entity Ratings to A. Rahim Foods (Pvt.) Limited

The assigned ratings of A. Rahim Foods (Private) Limited (“A. Rahim Foods” or “the Company”) reflect the Company’s dominant market position, operational performance, and ability to diversify and innovate its chosen segment of business. The Company benefits from the strong brand equity of its flagship products under the “Dawn” brand. Additionally, it has further strengthened its market presence through its sister companies: Dawn Frozen Foods Company (Pvt.) Limited, ATA Bakery Solutions (Pvt.) Limited, and AB Mauri Pakistan (Pvt.) Limited (engaged in yeast and bakery ingredients).
These ratings are also supported by the extensive industry experience of the Company’s sponsors and its highly qualified management team. Although the Company has not yet established formal board committees, this presents an opportunity to enhance its governance structure. A. Rahim Foods offers a diverse portfolio of products that cater to the varied needs of consumers across over 150 cities in Pakistan, with an extensive range of stock-keeping units (SKUs).
As a prominent player in the food processing sector, A. Rahim Foods has consistently achieved revenue growth while effectively managing market fluctuations, ensuring a robust financial standing. The Company’s recent expansion, which includes a state-of-the-art automated plant in Muridke, has significantly enhanced its production capabilities, further strengthening its market share. From a business standpoint, the Company generates revenue from seven product segments, including bread, buns, burgers, flatbread, paratha (frozen), rusk, and sweet cakes/muffins. Bread constitutes approximately 48% of total revenue, with burgers contributing around 36%, underscoring their importance in the Company’s overall financial performance.
The Company saw positive growth in its top line, driven by higher sales volumes. In FY24, the Company achieved a total revenue of PKR 12 billion (FY23: PKR 8 billion), representing an impressive 42% increase. However, the Company faced challenges from rising raw material costs due to inflation, which led to an approximately 8.6% decline in its gross profit margin. Despite higher finance costs, the net profit margin remained stable at around 2.3%. The margins have improved in the ongoing financial year, as represented by the management.
The Company’s maintains a sound financial risk profile, supported by sufficient coverage and a well-managed working capital cycle. Leverage indicators are stable, with debt levels kept low—primarily consisting of short-term borrowings to finance working capital needs and long-term borrowings for expansion projects. The Company’s proactive approach to market dynamics, adherence to global product quality standards, focus on customer satisfaction, and alignment with industry benchmarks further support its credit ratings.
The ratings are dependent on the management’s ability to maintain margins while ensuring self-sufficiency and sufficient surplus for expansion. Maintaining sound financial discipline, prudent working capital management, and adequate cash flow and coverage will be crucial for ratings.

About the Entity
A. Rahim Foods was incorporated in 1987 as a Private Limited Company. The Company’s ownership is split between two members, Mr. Anwaar Hussain and his brother Mr. Noman Hussain. Under their able leadership, the group has transformed itself into a fast growing business. The CEO is Mr. Anwaar Hussain. He is assisted by a group of professionals.