VIS Reaffirms 'A+/A-1' Ratings for Bhanero Textile Mills Limited with a Stable Outlook.

Karachi -- VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Bhanero Textile Mills Limited (BHAT) at 'A+/A-1' (Single A Plus/A-One). The medium to long-term rating of 'A+' signifies robust credit quality and adequate protection factors, while the short-term rating of 'A-1' indicates high certainty of timely payment and excellent liquidity. The outlook for these ratings remains 'Stable,' reflecting the company's strengths and challenges.

The reaffirmed ratings take into account Bhanero Textile Mills Limited's substantial sponsor group strength, decades of experience in yarn and fabric production for international and domestic markets, sustained client partnerships, notable governance practices, and recent capacity expansion efforts. The ratings also highlight strong revenue growth, despite declining export volumes due to rupee depreciation, supported by high-profit retention that has maintained leverage ratios in line with industry peers.

However, the company has faced challenges, including shifting margins, cash flow impacts, and debt servicing metrics due to factors such as increased reliance on imported cotton and economic and operational challenges. Despite an extended working capital cycle, the company's liquidity profile remains sound. Nevertheless, the high-interest rate environment, inflation, rising raw material costs, energy crises, and a...