Karachi: VIS Credit Rating Company Ltd. has reaffirmed the entity ratings of Comfort Knitwears (Private) Limited at ‘A-/A-2,’ indicating a stable financial outlook and good credit quality for the medium to long term. The short-term rating reflects a strong likelihood of timely repayment due to robust liquidity factors.

According to VIS Credit Rating Company Limited, the ratings reflect a mix of medium business risks linked to the economic cyclicality and competitive intensity in Pakistan’s textile sector. Comfort Knitwears, with over three decades of industry presence, operates an integrated knitwear facility in Lahore, engaging in every stage from spinning to stitching, which provides it with significant control over product quality.

The company’s financial health in FY23 was marked by stable export revenues despite a decrease in volume, while local sales suffered from reduced production. The ratings also considered financial risks, noting a decline in gross and net margins due to rising operational costs and a high level of debt, which have been somewhat mitigated in the first half of FY24 through improved liquidity and debt coverage metrics. Comfort Knitwears primarily serves clients in European and American markets, with a significant reliance on its top ten clients.