⚡ Flash Summary

International Knitwear Limited (INKL) reported a robust financial performance for the year ended June 30, 2025, with a significant increase in net sales, gross profit, and earnings per share. The company achieved record-high turnover driven by substantial rise in sales volumes, particularly in the local market. However, margin pressures persisted due to higher freight expenses and input costs. The board has recommended a final cash dividend of 10%, equivalent to PKR 1.0 per share, reflecting confidence in the company’s cash-generating capability and strategic investments.

📌 Key Takeaways

• 🚀 Net sales increased by 42.33% to Rs. 1.21 billion in 2025 from Rs. 850.50 million in 2024.
• 💰 Gross profit rose by 30.66% to Rs. 106.35 million in 2025 from Rs. 81.40 million in 2024.
• 📈 Profit before income taxes surged by 84.08% to Rs. 49.30 million.
• 🌟 Profit after income tax soared by 179.42% to Rs. 30.86 million.
• 💸 Earnings Per Share (EPS) skyrocketed by 179.82% to Rs. 3.19 from Rs. 1.14.
• 🚚 Freight expenses impacted margins, with gross margin declining to 8.78% from 9.57%.
• 🌍 Export revenue increased by 13.74% to Rs. 556.66 million.
• 🇵🇰 Local sales surged by 80.20% to Rs. 653.91 million.
• 🌱 Capital expenditure increased by 58.04% to Rs. 35.97 million, reflecting investments in new facilities and equipment.
• 🔆 A 250 KW solar power project was commissioned, aiming to mitigate rising energy costs.
• дивиденды The Board recommended a 10% final cash dividend (PKR 1.0 per share).
• 💪 Total assets employed increased to Rs. 811.36 million, an increase from the prior period’s Rs. 482.61 million.
• ♻️ The company emphasizes sustainability, committing to reducing environmental impact and promoting responsible business practices.
• 📊 Return on Equity (ROE) stood at 15.87% compared to 6.60% last year.
• 👑 Board committed to cost efficiencies and operational improvements to maximize shareholder returns.

🎯 Investment Thesis

I recommend a BUY rating for INKL, based on its strong revenue growth and EPS performance. Although the negative operating cash flow and potential liquidity issues represent concerns, the company’s strategic investments and commitment to sustainability create a positive outlook. I believe that INKL’s management will take corrective measures and the stock will yield healthy returns in the medium-to-long term, contingent upon the resolution of potential risks. The expansion of solar power usage reflects positively. This is a Pakistani company and the economic and geopolitical situation in Pakistan always bears added risk.