PACRA Upgrades Entity Ratings of Jinn Petroleum (Pvt.) Limited

Jinn Petroleum (Pvt.) Ltd. ('Jinn Petroleum' or 'the Company') is evolving as an emerging player in the oil marketing companies (OMC) sector. The Company gathers support from the Sponsor's acumen and strategic alliances across the PoL supply chain. The ratings reflect an improved business profile of the Company in line with the current dynamics of the petroleum industry. The Company demonstrates consistent progress toward retail expansion, supported by a network of 98 operational retail outlets. Currently, Jinn Petroleum operates through two storage facilities located at HUB (3,845MT) and Sahiwal (9,300MT), along with hospitality arrangements at Kemari, Port Qasim, MehmoodKot, Shikarpur, Machike, and Gatti. The expansion of Sahiwal's storage facility capacity, of ~6,800MT, has been lately commissioned; thus, enhancing the allowed retail network up to ~170 pumps. The expanded capacity became fully operational during FY25. However, the successful and timely construction and commissioning of the two new storage facilities at Daulatpur and Sara-e-Norang, with an approx. storage capacity of 475MT and 440MT, respectively, remains imperative. The Company's business risk profile remains adequate and is characterized by limited market share. Jinn Petroleum primarily generates revenue from the marketing and selling of POL products and posted a growth of ~46%. This is primarily attributable to price adjustments alongside volumetric uptake. While business margins remain on the conservative end. Going forward, the Company is eyeing considerable hospitality income along with self-utilization. The Company primarily relies on local refineries, while, fortifying on imports as per its requirements. On the financial risk front, coverages and working capital management remain adequate. While, the capital structure gathers support from reduced reliance on borrowings to fund the working capital requirements. To sustain the risk profile, a recent structural shift in the Company's shareholding has been observed by bringing in Mr. Syed Saeed Athar and his family - a local player in the oil trading and ship breaking arena - as a strategic acquirer of ~25% stake and an equity injection of ~PKR 478mln in the Company. This seems to shape new dynamics for the Company, going forward.
The ratings are dependent on Jinn Petroleum’s ability to improve market penetration along with sustaining the business margins. Successful and timely materializaton of the Company's strategic initiatives (construction and commissioning of new storage facilities along with retail expansion) remains imperative to the ratings. Financial metrics needs to be upheld in terms of working capital ratios, coverages and capital structure. Moreover, streamlining the governance framework remains crucial.

About the Entity
Jinn Petroleum (Pvt.) Limited ('Jinn Petroleum' or 'the Company') was incorporated in 2016. The Company primarily generates revenue from the marketing business of POL products. The Company operates with a retail network of 98 pumps and a storage capacity of 13,145 MT.
The Sponsoring families holds ~75% shares, out of which Mr. Ashar Siddique holds ~41% stake in the Company. While, the remaining stake of ~25% is latey acquired by Mr. Syed Saeed Athar and his family. The Board is chaired by Mr. Asad Azhar Siddique. While, Mr. Ashar Siddique heads the Company as the CEO. They are assisted by an experienced management team.