Press Release
VIS Upgrades Entity Rating of Madina (Pvt.) Limited
Karachi, September 21, 2026: VIS Credit Rating Company Limited (VIS) has upgraded the medium to long-term entity rating of Madina (Pvt) Limited (‘MPL’ or ‘the Company’) from ‘BBB’ (Triple B) to ‘BBB+’ (Triple B Plus) while maintaining the short-term rating at ‘A2’ (A Two). The medium to long-term entity rating of ‘BBB+’ reflects adequate credit quality, protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A2’ indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on September 3, 2025.
MPL was incorporated in January 2020 and commenced commercial operations in February 2021. The Company is engaged in the manufacturing and sale of vanaspati ghee, cooking oil, and allied products, marketed under the brand names 'Rabi' and 'Rajhi', with an installed capacity of 125,000 MT per annum. MPL is part of the Madinah Group, a family-owned business with over 50 years of experience across the edible oil, sugar, ethanol, detergent, plastics, power generation, steel, and mass media sectors. The Company's factory and registered office are in Karachi, while its head office is based in Faisalabad.
Pakistan's edible oil industry is characterized by intense competition, driven by inelastic consumer demand and heavy reliance on imported raw materials. As a staple commodity, consumption remains largely stable across economic cycles; however, import dependency and weather-related supply variability, particularly affecting palm and soybean oil, introduce periodic volatility in input costs. While barriers to entry are relatively low, regulatory compliance requirements and economies of scale continue to favor established players with greater processing capacity and distribution reach.
The ratings reflect improved financial risk profile of MPL. The Company exhibited a marked improvement in sales during FY26, reversing the two-year contraction period witnessed in FY24 and FY25, driven by a rebound in volumes across both bulk and branded retail segments. While gross margins have remained rangebound amid elevated and volatile raw material costs, net margins improved notably, supported by better cost rationalization at the operating and administrative level. Resultantly, net profit stood significantly higher during FY26. The capital structure is considered sound, underpinned by the continued absence of long-term debt and a marked reduction in short-term borrowings, resulting in significant deleveraging of the balance sheet by end-FY26. Debt coverage and liquidity indicators strengthened further aided by healthy cash flow generation during FY26.
Going forward, the ratings remain sensitive to the inherent sector volatility, particularly the trajectory of international raw material prices and exchange rate movements, which could exert pressure on margins. VIS will continue to monitor the Company's ability to sustain healthy recovery in sales and profitability while maintaining its financial risk profile amid challenging and volatile industry backdrop.
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