Press Release

VIS Maintains Entity Ratings of H.A Fibres (Pvt.) Limited (HAFL)

Karachi, October 02, 2023: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of H.A Fibres (Private) Limited (HAFL) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned ratings has been revised from ‘Positive’ to ‘Stable. The long-term rating of ‘A-’ signifies good credit quality; protection factors are adequate. 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. The previous rating action was announced on June 23, 2022.

H.A Fibres (Pvt.) Limited (HAFL) was incorporated as a private limited company in May 2006 under the Companies Ordinance 1984 (Now Companies Act 2017). HAFL is a spinning unit located at Multan. The company is a part of ‘H.A group’; other two group companies are Husnain Textile Mills (Pvt.) Limited (HTML) and Palm Villas, an Association of Persons in real estate sector.
Ratings takes into account high cyclicality and competitiveness in the spinning sector, demand slowdown locally and internationally and supply challenges due to limited foreign exchange availability, which resulted in a higher business risk profile during the review period. However, as per industry and management estimates, stable growth in demand is expected in the ongoing year in view of gradual recovery of the overall economy on national and international fronts; materialization of the same will be important from ratings perspective going forward.

Revision in rating outlook is reflective of reduced profit margins and liquidity coverages due to challenging external operating environment. Revenue growth momentum in the review period was supported by higher average selling prices. On the profitability front, where margins have historically garnered support from premium pricing of specialized yarn and share of profit of associates, the same were under pressure in 9MFY23 due to currency devaluation and higher input & financial costs. In addition, weakening was noted in the liquidity profile of the Company with lower cash flow coverage against outstanding obligations in the review period due to subdued profitability. With elevated working capital needs, debt levels surged, however, capitalization indicators remained commensurate with the assigned ratings. Ratings are underpinned on recouping financial indicators to levels that align with the benchmarks for the assigned ratings.

For further information on this rating announcement, please contact the undersigned (Ext: 207) at (021) 35311861-64 or email at

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (May 2023)

VIS Issue/Issuer Rating Scale

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