PACRA Maintains the entity ratings of Hilal Foods (Pvt.) Limited

Hilal Foods (Pvt.) Limited (“Hilal Foods” or “the Company”) remains one of the country's leading FMCG companies in the value-added food sector, boasting advanced manufacturing facilities and a portfolio of renowned brands built on innovation and excellence. Since its inception in 1957, the Company has maintained a high standard of quality and continuous improvement, leveraging the strong brand equity of its flagship brand “Hilal” to drive market positioning and competitive advantage. The Company’s diverse product line comprises more than 40 products across two major verticals: Confectionery and Baking, featuring market-leading niche brands such as “Ding Dong,” “Freshup,” “CupKake,” and “Bake Time.” Additionally, the Company has expanded its operational footprint by offering toll manufacturing services to both local and multinational brands, further solidifying its industrial standing.
The assigned ratings reflect the Company’s dominant market position and its proven ability to diversify, with revenue streams where each of the top five products now contributes more than PKR 2 billion. This diversity serves as a significant credit strength amidst increasingly intense and multi-dimensional competition, prompting management to proactively deploy strategies to preserve its market share. Revenue remains almost evenly distributed between segments, with ~44% from baking and ~56% from confectionery; however, the top line remained largely stagnant in FY25 as a decline in export sales (falling to ~4% from ~7%) offset improved domestic performance (~96%). Profit margins faced compression during the period due to a slight increase in the cost of sales, though net margins were supported by reduced finance costs following a decline in interest rates. The Company maintains a sound financial risk profile characterized by an efficient working capital cycle and improved leverage indicators, while the sponsors’ historical commitment and the voluntary adoption of the “Code of Corporate Governance” continue to reinforce institutional creditworthiness.
The ratings remain dependent on the Company’s ability to achieve consistent growth and a meaningful recovery in profit margins. Maintaining sound financial discipline, ensuring prudent working capital management, and sustaining adequate cash flow and debt coverage will be crucial for the ratings.

About the Entity
Hilal Foods (Pvt.) Limited was established in 1957 under the name Hilal Confectionery (Pvt.) Limited. Subsequently, the company merged with Kings Food Company and was renamed as Hilal Foods (Pvt.) Limited. Ownership remains primarily concentrated within the Munshi family. Mr. Fahad Munshi serves as the Chief Executive Officer, supported by a team of seasoned professionals.