Press Release

VIS Credit Rating Company Reaffirms Entity Ratings of Best Fibres (Private) Limited

Karachi, May 13, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Best Fibres (Private) Limited (BFL) at ‘A-/A-2’ (Single A/A-Two) (Single A minus/A-Two). Outlook on the assigned ratings is ‘Stable’. Long Term Rating of ‘A-’ good credit quality with adequate protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and fundamental protection factors. The previous rating action was announced on April 05, 2021.

Incorporated in 2017 as a private limited company, BFL is principally engaged in manufacturing and sale of yarn made from viscose, staple, fiber, cotton and / or man-made fiber. Spinning facility of the Company is situated on Sheikhupura road, Khurrianwala, Tehsil Jaranwala, District Faisalabad in the province of Punjab.

Assigned ratings take note of recovery in topline led to surge in demand for yarn in the local market, post pandemic. Ratings also account for ongoing replacement and capacity expansion program currently underway which is expected to augment revenues as well as contribute towards higher operational efficiencies; full impact of which will become evident by the end of this ongoing fiscal year. However, ratings remain vulnerable due to commodity price fluctuations and exchange rate volatility. Ratings also incorporate uptick in margins in FY21, attributable to inventory gains, however, subsequently margins have reverted and depict further stress in view of the current raw material prices and inflationary pressures. While margins have historically remained low, improvement in the same, going forward, will remain important for ratings.

Assessment of financial profile indicates improvement in capitalization indicators on a timeline basis, however gearing and leverage maybe impacted due to capital expenditure funding planned, going forward. Liquidity profile remains constrained due to balance sheet mismatch. Going forward, improvement in margins and capitalization indicators along with enhancement in liquidity profile will remain important for the ratings.


For further information on this rating announcement, please contact Ms. Sara Ahmed on the undersigned (Ext. 207) at 021-35311861-70 or email at info@vis.com.pk




Sara Ahmed
Director

Applicable Rating Criteria: Corporates (August 2021)
https://docs.vis.com.pk/docs/CorporateMethodology202108.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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .