Press Release
VIS Upgrades the Medium to Long-term Rating of JK Dairies (Private) Limited
Karachi, March 3, 2026: VIS Credit Rating Company Limited (VIS) has upgraded the medium to long-term entity rating of JK Dairies (Private) Limited (‘JKD’ or ‘the Company’) from ‘BBB+’ (Triple B Plus) to ‘A-’ (Single A Minus) while maintaining the short-term rating at ‘A2’ (A Two). The medium-to long-term rating of ‘A-’ indicates good credit quality; protection factors are adequate. Risk factors may vary with changes in economic conditions. The short-term rating of ‘A2’ indicates a 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 December 24, 2025.
JKD is a commercial dairy project benefiting from favorable demand dynamics, continued scaling of operations, strengthening of its financial profile and improving relevant position amongst peers. The ratings also factor in the Company’s association with the JK Group, a leading Pakistani conglomerate with diversified interests, which provided strategic as well as financial support.
Operating in a non-cyclical dairy segment, JKD has demonstrated steady growth, with increase in net revenue, supported by higher milk yields and valuation gains arising from livestock biological transformation. Customer concentration risk remained, with one major client; which is mitigated by sustained demand for milk as a dietary staple, the strong market reputation of said client, and the availability of alternative packaged milk manufacturers.
Gross margin improved mainly on the back of higher sales from customers, and an increase in fair value gains on livestock’s biological transformation, while largely maintaining raw material costs. Operational efficiency improved following the development of additional animal sheds, and the installation of automated milking parlors, while planned imports of high milk yielding heifers are expected to further enhance milk yield per animal. The Company also reduced reliance on grid energy through the integration of solar power. Improvement in gross margins, and lower finance costs, supported the uptick in net margins. Consequently, debt coverage metrics strengthened, while the Company maintained a largely conservative leverage profile. Liquidity was supported by a negative cash conversion cycle, and an improving current ratio, though remained below 1.0x, primarily due to structurally low inventory levels inherent in commercial dairy farming. Going forward, further herd expansion, and productivity gains are projected to support revenue growth. Sustained debt coverage, capitalization, and liquidity indicators will remain important from ratings perspective.
For further information on this ratings announcement, please contact at 021-35311861-64 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