Press Release
VIS Updates Entity Ratings of BSP Foods Private Limited (Formerly Bismillah Sehla Processing Plant (Pvt.) Limited)
Karachi, August 22, 2025: VIS Credit Rating Company Limited (VIS) has updated entity ratings of BSP Foods Private Limited (Formerly Bismillah Sehla Processing Plant (Pvt.) Limited) (‘BSPL’ or ‘the Company’) at 'BBB+/A2' (BBB Plus / A Two). Medium to long term rating of 'BBB+’ indicates adequate credit quality; Protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. Short term rating of 'A2' indicates a good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. The outlook on the assigned rating is ’Stable’. Previous rating action was announced on April 07, 2025.
BSPL is a family-owned business with major shareholding vested with Mr. Zulfiqar Ali who also spearheads the management team. The company is primarily involved in the business of rice processing with local sales and export sales to Europe, Middle East, Africa and other parts of the world. Apart from selling its products in the wholesale market, the company has also established a brand by the name of ‘Wadah’ for the local retail market.
The assigned ratings incorporate the business risk profile of Pakistan’s rice sector, which remains exposed to challenges related to raw material availability and international freight charges. Fluctuations in freight costs, influenced by competition and demand-supply dynamics, continue to pose a key risk for rice exports. Additionally, the lifting of export restrictions by India has intensified market competition, increasing price volatility. Nonetheless, growing global population supports long-term demand prospects.
Ratings also take into account the Company’s financial risk profile, exhibiting revenue growth during FY24 on the back of higher exports. The Company’s gross margin decreased slightly primarily due to higher cost of sales, which stemmed from inflationary pressures and an increase in husking and processing charges. Net margin also stood lower due to higher operating expenses and financial charges. In 10MFY25, rice export revenue was adversely affected mainly due to intensified competition. While overall sales declined, the Company managed to increase its local sales, supported by higher domestic prices, which also helped to improve gross margin. This combined with decrease in finance costs and lower incidence of taxation supported net margins. The Company maintains a sound liquidity profile and coverages, with adequate capacity to meet its obligations. However, cash conversation cycle remained elevated due to higher inventory and debtors days. Meanwhile, gearing increased due to higher short term borrowings mobilized for seasonal procurement of paddy in 10MFY25. Going forward, ratings will remain sensitive to the company’s ability to sustain its topline and profitability margins and an improvement in its capitalization profile. Moreover, the management’s ability to maintain coverage and liquidity metrics will also be important considerations for future reviews.
For further information on this rating 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