PACRA Assigns Initial Ratings to Waheed Hafeez Ghee Industries (Pvt.) Limited

The ratings reflect Waheed Hafeez Ghee Industries (Pvt.) Limited’s (‘Waheed Hafeez’ or ‘The Company’) association with Waheed Group of Companies ("the Group"). The Group has established a leading position in the edible oil and ghee sector, comprising its specific markets. There are five principal operating companies in this group; Waheed Hafeez Ghee Industries (Pvt.) Ltd., Khadija Edible Oil Refinery (Pvt.) Ltd., Neelum Oil & Ghee Industries (Pvt.) Ltd., AK Oil and Ghee Industry (Pvt) Ltd. and Lal Oil & Ghee Mills (Pvt.) Ltd. Furthermore, the Group benefits from a substantial combined production capacity exceeding ~850,000mln tons per annum for vegetable ghee and edible oil. This provides ability to meet large-scale market requirements and ensures operational efficiency. The Company also benefits from the growing brand equity of its flagship products (Fauji Supreme, Islamabad, Perlli, Phool, Zeenat). The ratings incorporate the extensive and diverse experience of the Company's sponsors across sectors, including CNG equipment & stations, industrial fats, electrolytic tinplate sheets, hospitality, construction, and real estate development. The group has recently ventured into olive farming and acquired land of more than 1000 acres to support and promote local agricultural development. The absence of formally established board committees indicates an opportunity to further strengthen governance frameworks and enhance specialized oversight mechanisms. Furthermore, the existence of a centralized finance function that manages all Group companies under a unified framework enhances financial oversight and provides additional comfort for the assigned rating.
The Company has demonstrated consistent top-line growth of 20.7% during FY24 (FY23: 16.9%). This growth trajectory has been primarily supported by the Company’s strategic positioning in the northern region, which has enhanced regional sales penetration. The Company’s debt service coverage indicators have strengthened, reflecting a prudent financial strategy characterized by limited dependence on long-term external borrowings. This has enhanced its capacity to meet short-term debt obligations. However, the Company’s leverage profile has weakened due to a significant rise in short-term borrowings, resulting in elevated financial risk. In addition, a deterioration in the working capital cycle points to emerging inefficiencies in liquidity management. Nonetheless, the capital structure remains conservative, with the entirety of borrowings concentrated in short-term facilities indicative of a cautious approach to debt utilization. Ongoing sponsor support continues to provide a degree of credit comfort and underpins the overall ratings assessment.
The ratings are dependent on the management's ability to maintain its growing business volumes while sustaining margins and profitability. Prudent management of working capital and maintaining strong coverages is critical. Brand reputation and customer retention provide support to the ratings.

About the Entity
Waheed Hafeez (Pvt.) Limited (‘the Company’) was incorporated in September 1993 as a Private Limited Company. The Company is primarily engaged in the production and sale of refined, branded cooking oil & ghee. The Company has its production facility in Hattar, KPK, with a production capacity of 350MT/ day. The Company’s majority ownership resides with family sponsors, with Mr. Abdul Waheed (~90%) and his wife, Ms. Rubina Kausar (~10%). The CEO, Mr. Abdul Waheed, is supported by a team of experienced professionals.