⚡ Flash Summary

Khyber Tobacco Company Limited’s (KHTC) 70th Annual Report for the year ended June 30, 2025, reveals a strong recovery in financial performance. The company reports a surge in net sales, turning a prior year loss into a significant profit, including increases in earnings per share. KHTC improved production with a focus on lean operations, cost management, and modernization. Management is optimistic about future growth and expects increases in export orders while also ensuring full compliance with the track and trace system.

📌 Key Takeaways

• 🎉 KHTC’s 70th Annual General Meeting scheduled for October 24, 2025.
• 📈 Net Sales surged to Rs. 9,890.70 million, a three-fold increase from Rs. 3,113.7 million last year.
• ✅ Profit Before Taxation of Rs. 414.32 million reversing a loss of Rs. 1,018.09 million from the previous year.
• 🚀 Profit After Taxation reached Rs. 274.64 million compared to a loss of Rs. 1,021.99 million in the prior year.
• 💰 Earnings Per Share (EPS) is now Rs. 39.67, rebounding from a loss per share of Rs. 147.63 last year.
• 🏭 Production of cut tobacco increased by 815,580 kilograms compared to the previous year.
• 🚬 Cigarette production increased by 887 million sticks compared to last year.
• 🌐 Export sales are expected to increase, leading to a notable rise in foreign exchange inflows.
• 🌱 Capital and reserves increased by Rs. 238.85 million.
• ✅ Ensured full compliance with the Track & Trace System.
• ⚙️ Implemented rigorous cost management strategies and embraced lean principles.
• 💪 No liquidity issues and does not require external financing.
• 💼 Provision of Rs. 47.79 million created for employee retirement benefits.

🎯 Investment Thesis

KHTC is a **BUY** based on its impressive financial turnaround, with enhanced sales and earnings growth. The increased focus on operational efficiency and export opportunities positions the company for sustainable growth. The absence of external financing needs further supports this recommendation. The primary risk is failure to capitalize on export opportunities. KHTC’s strong financial position and focus on operational improvements make it an attractive investment.