Press Release

VIS Reaffirms Entity Ratings of Shakarganj Foods Products Limited

Karachi, November 25, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Shakarganj Foods Products Limited (‘SFPL or ‘the Company’) at ‘BBB-/A3’ (Triple B Minus/A Three). Medium to long-term rating of ‘BBB-’ reflects adequate credit quality; Protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. Short-term rating of ‘A3’ indicates fair likelihood of timely repayment of short-term debt obligations with satisfactory liquidity factors. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on July 3, 2024.

SFPL is a public limited company, principally engaged in manufacturing, processing and sale of food products including dairy, fruit pulps, and concentrated juices. Shakarganj Mills Limited and BankIslami Pakistan Limited hold majority of shareholding. Registered office of the Company is located in Lahore.

The Company recorded a net loss in FY24 and 1HFY25 due to decrease in net sales, increasing cost pressures and high, though declining, financial charges. Debt servicing coverage profile weakened amid strained cash flows. To address the liquidity challenges, the Company revised payment terms with creditors, which improved the cash conversion cycle. Despite contraction in equity base, gearing remained on a low on account of repayment of long-term borrowings while debt leverage increased further due to elevated trade and other payables at end-1HY25. Management is focused on adjusting pricing and distribution strategies to better serve market demands. Easing cost pressures to boost cash flows, delivering projected growth in value-added segments and recovering sales tax receivables are important for improvement in financial profile of the Company. Assigned rating hinges on rebound in margins and profitability, and strengthening debt service coverage ratios.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk

Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale:
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright November 25, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.