Press Release

VIS Upgrades Entity Ratings of Kausar Ghee Mills (Pvt.) Limited

Karachi, 25 February, 2025: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Kausar Ghee Mills (Pvt.) Limited (“KGML” or “the Company”) from A-/A2 (Single A Minus/A Two) to ‘A/A1’ (Single A /A One). The medium to long-term rating of ‘A’ denotes good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short-term rating of ‘A1’ reflects strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned rating is ‘Stable’. Previous Rating action was announced on August 08, 2023.

KGML, established in 1992, is involved in the manufacturing of Vegetable Ghee, Cooking Oil, and allied products. KGML is a family-owned business concern, with the Board of Directors comprising eight directors, all being members of the sponsoring family. The Company is associated with Kausar Group of Companies, having business stake in various sectors involving edible oils, poultry, feed and rice processing. Furthermore, the Company has a well-established distribution network, with over 300 distributors, spanning 3 provinces and 400 towns. The Company sells products under the brand name 'Kausar,' including ghee, cooking oil, meal canola, soybean, and other by-products.

The rating upgrade reflects the Company’s strong financial performance over the years despite challenging macroeconomic environment, with consistent improvement in gross margins. KGML’s net margins have also remained sound vis-à-vis peer companies. The topline of the Company recorded growth, primarily driven by increased volumes across all categories. Capitalization profile of the Company draws strength from its conservative capital structure, with short-term borrowings generally mobilized for short period of times to meet working capital requirements, while having no reliance on long-term debt. The company remained virtually debt free over the years especially keeping in consideration maintenance of healthy liquid short-term investments along with cash & bank balances. The debt service coverage ratio (DSCR) has remained sizeable in the absence of long-term debt. Ratings also incorporate business risk profile of the edible oil industry characterized by sensitivity of profit margins to fluctuations in foreign exchange rates and international commodity prices. Liquidity profile of the Company is also considered sound. Going forward, maintenance of profitability margins, capitalization and liquidity profile will remain important from the ratings perspective.

For further information on this ratings announcement, please contact on 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

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 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .