Press Release

VIS Assigns Initial Ratings to Bismillah Sehla Processing Plant (Pvt.) Limited

Karachi, September 13, 2023: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB+/A-2’ (Triple A Plus/A-Two) to Bismillah Sehla Processing Plant (Pvt.) Limited (BSPL). The medium to long-term rating of ‘BBB+’ signifies adequate credit quality where protection factors are reasonably sufficient. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned rating is ‘Stable’.
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.
Rice is one of the major staple foods and agriculture export of the country. Rice production decreased mainly due to floods affecting overall production levels and adversely affected exports levels in FY23. With better crop projected in FY24, exports are expected to increase, going forward. Rice being an internationally traded commodity the assigned ratings take into the account the natural cyclicality in its availability which has a bearing on its business risk.
The company has exhibited growth in sales over the years. Net sales increased in FY22 and HY23 on the back of both higher volumetric growth and selling price. The gross margin increased during HY23 due to better average selling prices. The customer-wise concentration in export sales was high at end-June’23. According to the management, BSPL has exhibited long-term association with these customers. The proportion of local sales in total sales has been increasing in recent years. Going forward, the management plans to focus on exports with efforts to enhance quantum of branded product sales (Wadah) to realize value added margins.
Coverages, including FFO to total debt and DSCR, remained sound in FY22 and HY23. Given profit retention, equity base has enhanced on a timeline basis. Apart from equity, the balance sheet is funded mainly through short-term borrowings. The company mobilized seasonal short-term borrowings in HY23 primarily to finance raw material inventory. Gearing and leverage ratios remained manageable. As the company has no plans to mobilize long-term financing in the medium term, the management is projecting gradual decrease in leverage indicators, going forward.
For further information on this rating announcement, please contact the undersigned at 021-35311861-64 (Ext. 201) or email at

Javed Callea

VIS Entity Rating Criteria: Industrial Corporates (May 2023)
VIS Rating scale (2023)

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