PACRA maintains Entity Ratings of Qadir Agro Industries (Pvt.) Limited

The ratings indicate the Qadir Agro Industries (Pvt.) Limited’s (‘the Company’) evolving presence in both the edible oil and poultry feed sectors within the country. The ratings are underpinned by the substantial experience and strategic management of the sponsors, which remain crucial to the Company's operational effectiveness. The sponsors maintains a diversified business portfolio, with strategic investments in textile manufacturing, edible oil processing, and animal feed production, including the operations of Roomi Poultry. In FY24, the total imports of edible oil, including oil extracted from imported oilseeds, clocked in at ~2.717mln metric tons, with a cumulative value of PKR 794bln. Due to the rise in input costs, especially raw material cost, many Companies have experienced a reduction in their profit margins and faced working capital shortages. The industry's future outlook is developing due to price volatility and PKR depreciation. With this, Qadir Agro Industries (Pvt.) Limited experienced a modest 5% contraction in topline revenue during the reporting period. The Company's revenue stream is primarily concentrated in the poultry feed segment, accounted for 94% of total sales, followed by others (6%). The Company exhibited stable gross profit margins, supported by a marginal decrease in the cost of goods sold. Concurrently, net profit margins experienced a slight improvement, largely driven by a reduction in finance expenses. The Company maintains a conservative capital structure characterized by low leverage, primarily funded through internally generated cash flows. This strategic maneuver significantly strengthened the Company's financial profile. Furthermore, Qadir Agro Industries significantly improved its Cash Conversion Cycle (CCC) by optimizing inventory, receivables, and payables management. This resulted in a notable improvement in net working capital efficiency, directly enhancing the organization's liquidity. It is pertinent to note that, as an importer of oilseeds, the Company remains exposed to fluctuations in foreign exchange rates, presenting a potential source of financial risk.
The ratings are dependent on the management's ability to prudently improve margins, profitability, and financial profile of the Company. Meanwhile, strengthening governance practices will have a positive impact on the ratings. Any deterioration in debt coverages leading to higher financial risk or substantial losses will adversely impact ratings.

About the Entity
Qadir Agro Industries (Pvt.) Limited (‘the Company’) was incorporated in July, 1987 as a Private Limited Company. The Company is primarily engaged in the process of seed filtering, crushing and solvent extraction. The Company primarily sells soybean oil/meal, canola oil/meal and poultry feed. The Company has seed crushing capacity of 250MT per day. The capacity of the poultry feed mill, currently, stands at 30MT per hour. The Company’s major ownership resides with Khawaja Mehr Baksh (~34%) and his sons, Khawaja Muhammad Shehzad (~33%) and Khawaja Muhammad Omer (~33%). Mr. Mehr Baksh is the Chairman of the Board, while Mr. Shehzad serves as the CEO of the Company.