Kausar Ghee Mills Receives Ratings Upgrade Amid Strong Financial Performance

Karachi: VIS Credit Rating Company Limited (VIS) has announced an upgrade in the entity ratings of Kausar Ghee Mills (Pvt.) Limited, elevating its status from A-/A2 to ‘A/A1’. This reflects a strong financial standing with the medium to long-term rating indicating good credit quality and adequate protection factors. The outlook remains stable, suggesting a strong likelihood of timely repayment of short-term obligations.

According to a statement by VIS Credit Rating Company Limited, the upgrade is attributed to Kausar Ghee Mills’ robust financial performance in recent years, despite a challenging macroeconomic climate. The company has shown consistent improvement in gross margins, with net margins remaining strong compared to industry peers. The company’s revenue growth has been primarily driven by increased sales volumes across all product categories.

Kausar Ghee Mills, established in 1992, is a family-owned enterprise involved in the production of vegetable ghee, cooking oil, and related products. Operating under the Kausar brand, the company is part of the larger Kausar Group of Companies and benefits from a broad distribution network of over 300 distributors across three provinces and 400 towns in Pakistan.

The company’s conservative capital structure, highlighted by minimal reliance on long-term debt and a strong liquidity profile, has been pivotal in achieving the ratings upgrade. The effective management of short-term borrowings and maintenance of healthy liquid investments underscore its financial resilience.

The edible oil industry, while characterized by profit margin sensitivity due to foreign exchange and commodity price fluctuations, shows a sound business risk profile for Kausar Ghee Mills. The company’s continued maintenance of profitability margins, capitalization, and liquidity will be crucial for sustaining its credit ratings in the future.