PACRA Maintains Entity Ratings of Irfan Noman Brothers (Private) Limited

The ratings reflect Irfan Noman Brothers (Private) Limited’s established and prominent position within Pakistan’s rice export industry. The Company has consistently maintained its market share, supported by an effective customer retention strategy and a sustained international presence through marketing offices and warehouses in Dubai and Canada. The Company benefits from the strategic leadership of its sponsors, whose extensive international experience and successful business track record contribute to operational resilience and growth. A robust corporate governance framework, reinforced by stringent internal controls and a seasoned management team, underpins the Company’s operations. The sponsors’ strategic vision is evident in the development of a performance-driven corporate culture, enabling the Company to navigate the inherent challenges of the rice sector effectively. The rice sector, a significant contributor to Pakistan’s rice sector remains a key contributor to economic growth. While total rice production for CY25 was initially projected at approximately 10mln Mtons, but recent flooding in Punjab and Sindh affecting ~10–12% of the crop has disrupted supply chains, inundated agricultural land, and exerted upward pressure on domestic prices. These developments have posed significant challenges to both food security and the sector’s export competitiveness. In FY24, the Company recorded a notable 84% year-over-year increase in topline, primarily driven by record-high rice production. This growth was largely attributed to the favorable aftereffects of the floods experienced, which contributed to improved soil fertility and yields. However, this upward trajectory was not sustained in FY25. Adverse climatic conditions and reduced rainfall negatively impacted crop output, leading to a decline in the Company’s revenue by approximately 25.5%, primarily due to reduced sales volumes in both domestic and international markets. The decline in revenue was largely impacted by adverse pricing dynamics in the IRRI export market. Specifically, while IRRI export prices were stable in FY24 (ranging from $500 to $600 per metric ton), they fell sharply in FY25, settling between $400 and $450, due to India's surplus stocks. The sole exception was a specific Bulog tender priced at $555 per metric ton. The Company derives ~85% of its revenue from the export of basmati and Non basmati rice varieties, with major export destinations including Indonesia, Malaysia, China, and various African markets. In addition to its core rice export operations, the Company is engaged in the trading of solar panels, contributing to revenue diversification and enhancing overall financial resilience. Despite elevated input costs during FY25, the Company demonstrated improved profitability, reflecting effective cost management and operational efficiency. The net profit margin also saw a significant increase, due to substantial decline in finance costs. The Company’s capital structure is assessed as sound, underpinned by its reliance on short-term borrowing to manage working capital requirements. Furthermore, ratings take comfort from the sponsors’ depth of experience and unwavering commitment to accelerating the Company’s growth, this reinforces the ratings and strengthens the outlook for sustained operational success.
Prudent management and maintenance of a stable financial risk profile, especially in terms of the working capital, cash flows, and coverages is imperative for the ratings. Additionally, debt servicing, capitalizing international demands, and envisioned improvements in qualitative factors, going forward, remain crucial for the ratings.

About the Entity
Irfan Noman Brothers (Private) Limited (‘the Company’), established in February 1998 as a Private Limited Company, is primarily involved in processing both semi-processed non-basmati and basmati rice. The Company exports its products to Malaysia and over 40 additional countries, with a robust processing capacity of 420,000 metric tons annually. The leadership is spearheaded by the sponsors, Mr. Irfan Ahmad Sheikh, Chairman of the Board, and Mr. Noman Ahmad Sheikh, the CEO, whose strategic oversight continues to guide the Company’s operations.