PACRA Maintains Entity Ratings of Khadija Edible Oil Refinery (Pvt.) Limited

The ratings reflect Khadija Edible Oil Refinery (Pvt.) Limited's (or 'the Company') established presence across the edible oil sector including the process of refining crude palm oil; producing and selling cooking oil/ghee along with shortening. The Company encompasses growing brand equity for its edible oil brands (Fauji Supreme, Islamabad, Perlli, Phool, Zeenat). The group is presently capable of producing well over 850 million tons of vegetable ghee and edible oil every day, which is the largest capacity in Pakistan. The given rating is further supported by the extensive experience of its sponsors in the transport, hotel, construction, and development sectors as well. 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 edible oil sector effectively. As the country is highly reliant on imported edible oil, which mainly constitutes palm oil—a key ingredient in the company's production. The operations of the Company are strengthened by an experienced and qualified management team. The Company has the capability of refining 500 metric tons of CPO, and has a production of 300 metric tons of banaspati and cooking oil. The Company has diversified its revenue streams. The Company primarily generates its revenue through the sale of vegetable oil and ghee products, which accounts for approximately 80% of the total sales. Shortening plant with a production capacity of 90 metric Ton per day contributes around 15% in total sales of the Company and tolling income, which makes up about 5%. Elevated prices from early 2025 moderated in the second quarter, driven by a drop in inflation and a steadier exchange rate, a trend reflected by the Company's higher revenue. During the year, Company’s topline grew by approximately 4.1%, primarily driven by higher volumetric sales, reported at PKR 28,638mln (FY24: PKR 27,512mln). Revenue performance remained robust relative to peers, supported by sustained demand growth in the edible oil segment. Resultantly, Profit After Tax was reported at PKR 1,334mln, compared to PKR 448mln last year. Margins are functions of timeliness and prudence of raw materials (RBD Palm oil and palm olein) procurement. This positive trend is mirrored in profit margins. Gross and net profit margins inclined to 8.7% and 4.7% (FY24: 5.4% and 1.6% respectively). Financially, the Company maintains a strong risk profile, underscored by excellent coverage ratios and a healthy working capital cycle. Furthermore, leverage indicators remain stable due to low debt levels, which consist majorly of short-term borrowings for working capital needs. With an equity base of PKR 4,140 million, the Company demonstrates substantial financial strength.
The ratings are dependent on the management's ability to maintain its growing business volumes while sustaining margins and profitability. Prudent management of working capital and maintaining strong coverages is critical. Brand reputation and customer retention provide support to the ratings.

About the Entity
Khadija Edible Oil Refinery (Pvt.) Limited was incorporated in Dec-2005 as a Private Limited Company under the Companies Ordinance 1984. The Company is primarily engaged in the process of refining crude palm oil; producing and selling cooking oil/ghee along with shortening. The Company’s majority ownership resides with group company, Waheed Hafeez Ghee Industries (Pvt.) Limited (~87%). The remaining shareholding resides with Mr. Abdul Waheed (~13%). The Company is headed by Mr. Abdul Waheed, the CEO. He is ably supported by a team of experienced professionals.