VIS Upgrades Outlook on Best Fibres to Positive Amid Steady Financial Performance

Karachi, VIS Credit Rating Company Limited has revised the outlook on its ratings for Best Fibres (Pvt.) Limited (BFPL) from "Stable" to "Positive" while maintaining the company's entity ratings at 'A-/A-2'. The updated outlook reflects a positive adjustment based on the company's consistent financial performance despite broader economic challenges.

According to VIS Credit Rating Company Limited, the ratings affirmation and outlook upgrade take into account BFPL's role in the competitive spinning sector, which faces economic cyclicality and challenges such as crop damage and inflation. Despite these factors, BFPL has demonstrated resilience with a stable financial risk profile, as evidenced in its performance during the fiscal year 2023. The company is a key player in the manufacture and sale of yarn made from viscose staple fiber and cotton, with its operations based in Faisalabad, Punjab.

The positive shift in outlook is attributed to BFPL's sustained top-line growth and effective management of increased cost pressures, which have allowed it to maintain stable gross margins. The company's capitalization profile is noted as conservative, benefiting from continuous equity expansion and reduced reliance on short-term debt. Additionally, BFPL has maintained robust liquidity and coverage ratios, further supporting the positive outlook.

Looking ahead, VIS notes that BFPL's ratings will continue to be sensitive to its ability to diversify its client base and further enhance its profitability and liquidity positions. The ongoing maintenance of key financial metrics in alignment with the positive outlook will be crucial for future rating actions.