Press Release

VIS maintains entity ratings of H.A Fibres (Pvt.) Limited

Karachi, June 07, 2020: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of H.A Fibres (Pvt.) Limited (HAFL) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the rating has been revised from ‘Rating Watch - Developing’ to ‘Positive’. The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamentals and liquidity factors. The previous rating action was announced on April 24, 2020.

HAFL is engaged in the manufacturing and sales of combed and carded pure cotton and blended yarn. Shareholding of the company is entirely vested with the sponsoring family. The family also operates another spinning mill with the name of ‘Husnain Textile Mills (Pvt.) Limited’ (HTML); HAFL holds a little less than one third equity in HTML. HAFL is in the process of adding further spindles to enhance production capacity along with some BMR to improve operational efficiencies that are expected to be completed by end-Dec’21.

Topline exhibited growth in the ongoing year. Notable improvement was witnessed in margins during 9MFY21 mainly on the back of higher sale of organic yarn, supply of which has been disrupted as some of its major suppliers in sub-continent have been banned recently due to fraudulent activities. Meanwhile, debt service coverage has remained sound. Gearing has remained at comfortable level and is projected to remain within acceptable limits despite ongoing capacity enhancement. The positive outlook signifies growth in sales, improvement in margins, profitability and coverages. Ratings also incorporate positive outlook of the textile sector due to higher demand in export markets coupled with additional support to the industry on the regulatory front. Ratings will remain dependent on sustainability in revenue growth, profit margins, and maintenance of coverages and capitalization indicators, going forward. Moreover, materialization of intended capex over the estimated timeframe will remain important. Meanwhile, ratings remained constrained by vulnerability of spinning sector to raw material prices and any adverse changes in regulatory duties.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at

Javed Callea

Applicable rating criterion: Corporates (May 2019)

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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