PACRA Maintains Entity Ratings of Punjab Oil Mills Limited

The assigned ratings of Punjab Oil Mills Limited (“Punjab Oil” or “the Company”) are underpinned by its established positioning in Pakistan’s edible oil sector, with a meaningful footprint across the vegetable oil and Banaspati ghee segments. The Company has steadily strengthened its market presence through its flagship brand Canolive, supported by improving brand equity and a diversified product portfolio that also includes Zaiqa and Naturelle. Punjab Oil benefits from the extensive industry experience of its sponsors, complemented by a seasoned and professionally qualified management team. Governance standards are reinforced through structured board committees, enhancing oversight, transparency, and long-term strategic alignment. Pakistan’s edible oil sector remains structurally import-dependent, with approximately 87–90% of the country’s annual requirement met through imports. Palm oil continues to dominate the import mix, while soybean imports are recovering following the resumption of genetically engineered seed shipments. Punjab Oil’s operational model and sourcing strategy are aligned with these sector dynamics, supporting continuity of supply and operational synergies. During FY25, the Company reported topline growth of ~14.7%, with revenues reaching PKR 9,242 million (FY24: PKR 8,052 million; 1QFY26: PKR 2,605 million), primarily driven by favorable pricing dynamics. Sales remain concentrated in the cooking oil segment, contributing ~57.1% of gross sales, followed by Banaspati ghee at ~39.7%, reflecting a balanced product mix within the edible oil category. Profitability, however, remained under pressure amid elevated input costs, higher energy prices, and intense market competition, resulting in persistently thin gross margins. The Company reported a net loss of PKR 69 million in FY25 (FY24: PKR 37 million). Punjab Oil’s financial risk profile remains moderate, supported by a moderately leveraged capital structure, with working capital requirements largely met through short-term borrowings. The ratings also incorporate the active involvement and oversight of the sponsoring family, with participation in strategic and operational decision-making continues to provide stability and institutional continuity.
The ratings are dependent on the management’s ability to improve profitability and gain market share, while maintaining prudent working capital management. A substantial increase in leveraging may impact ratings.

About the Entity
Punjab Oil Mills Limited, most famous for its flagship brands Canolive and Zaiqa, is a public listed company. The Company was incorporated in 1983 and commenced operations in 1984. The primary business activity of the Company involves the manufacturing and sale of ghee, cooking oil, specialty fats, laundry soap, mushrooms, and coffee. The Company has its production facility located at the Industrial Triangle in Islamabad. The Company has the production capacity to process 18,000 M.T of Ghee/Specialty fats and 24,000 M.T of Cooking Oil. Three families, namely, the Jahangir Family, Malik Family, and Batla Family, have a shareholding in the Company. Other shareholders include NIT, Mutual Funds, Financial Institutions, and the general public. Mr. Ehtisham is the CEO of the Company and is assisted by a team of experienced professionals.