PACRA Maintains the Entity Ratings of Ibrahim Fibres Limited

Ibrahim Fibres Limited (“IFL” or “the Company”) is primarily engaged in the manufacturing and sale of Polyester Staple Fibres (PSF) and Yarn. The Company’s ratings reflect its long-standing presence in the industry, underscoring a commitment to innovation and technological excellence. Equipped with state-of-the-art machinery, IFL produces high-quality fibers through its vertically integrated operations, which include Polyester Plants and Textile Spinning Plants. These operations are supported by in-house power generation facilities utilizing HFO, gas, coal, and solar. IFL has a robust production capacity, with an annual output of 390,600 tons of PSF and 240,800 spindles for spun yarn, reinforcing its position as a key player in Pakistan’s textile industry. The Company dominates the local PSF production with a commanding 76% share, followed by Lucky Core Industries (24%) and Rupali Polyester (0.13%). While, the Company’s share in total local PSF consumption moderated to ~38.5% in CY25 (CY24: ~41.1%), reflecting a broader shift in market supply dynamics. The textile sector experienced a structural pivot in CY25 as a significant shortfall in domestic cotton production compelled spinners to adopt higher proportions of man-made fibers (MMF) to sustain operational output. This substitution effect drove an 8.3% volumetric growth in the PSF demand, with total supply reaching 657,075 tons/annum (CY24: 606,615 tons/annum). This demand was satisfied through a combination of domestic output and a sharp increase in imports. The sustained influx of competitively priced PSF imports remains a pivotal credit headwind. In CY25, import volumes surged ~23.5% YoY to 325,430 tons, representing a market penetration of ~50%. This persistent trend has structurally undermined the pricing power of domestic producers, precipitating suboptimal capacity utilization across the local sector. IFL reported ~14% annualized decline in revenue for 9MCY25, totaling PKR 78bln, as the Company grappled with softer volumes and pricing pressure. The Company’s gross, operating, and net margins remained stagnant at ~8.3%, ~5.2%, and ~2.0%, respectively. However, the Company remains committed to enhancing cost efficiency through Balancing, Modernization, and Replacement (BMR), process automation, and strategic capital expenditures to defend its market leadership. The Company prioritizes customer loyalty by implementing timely price adjustments to mitigate market fluctuations and maintain strong partnerships. IFL maintains a strong financial risk profile, characterized by solid coverage ratios and robust cash flows. Its capital structure remains low-leveraged, with short-term borrowings allocated for working capital needs and long-term borrowings dedicated to capital expenditures. Additionally, the Company benefits from its association with the Ibrahim Group, which has demonstrated strong financial support and stability.
The ratings depend on the Company’s ability to maintain its position in the local PSF industry while achieving topline growth and increased profitability amid a challenging business environment. Efficient capacity utilization and the resulting improvement in margins will be key factors in sustaining its financial strength.

About the Entity
Ibrahim Fibres Limited, incorporated in 1986 and listed on Pakistan Stock Exchange, is engaged in the production & marketing of PSF and yarn. Its production facilities are located at Shahkot near Faisalabad. Ibrahim Group holds majority stake (~91.80%) in Ibrahim Fibres through Group holding entity, Ibrahim Holdings (Private) Limited. The Company’s Board of Directors comprises seven members, including the newly appointed Chairman, Mr. Mohammad Naeem Mukhtar and CEO, Mr. Muhammad Waseem Mukhtar after the demise of Mr. Sheikh Mukhtar Ahmad.