Press Release

VIS Upgrades Entity Ratings of Staple Foods (Private) Limited

Karachi, May 08, 2024: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Staple Foods (Private) Limited (SFPL or “the Company”) from ‘A-/A-2’ (Single A Minus/A-Two) to ‘A/A-1’ (Single A/A-One). The medium to long-term rating of ‘A’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ reflects high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on March 13, 2023.

The Company has been engaged in the business of processing, milling and sale of variety of rice, mainly Basmati & IRRI, along with small scale setup of selling lentils, pickles and spices. The rice exports constitute more than 90% of the company’s total revenue. The company sells its products under the brand ‘Anmol’ which has significant recognition in the exports market. The assigned ratings derive support from the Company’s strong position in the IRRI & Basmati export market. Super Basmati Brown & IRRI White rice alone make up more than 50% of the Company’s exports. With better crop and the ban imposed on the export of non-basmati rice by a major rice producing country, exports are expected to increase in FY24. Rice being an internationally traded commodity, the ratings incorporate the natural cyclicality in its availability which has a bearing on its business risk.

The upgrade in ratings take into account the growing trend in sales witnessed on a timeline basis supported by increasing product prices, sustained margins, healthy debt service coverages and low debt leverages. The profitability and liquidity profile of the company thus remained sound and is projected to maintain its financial profile. The ratings remain dependent on the retention of market share while maintaining overall financial metrics, going forward.

For further information on this rating announcement, please contact at 042-35723411-12 or email at info@vis.com.pk



Applicable Rating Criteria: Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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