⚡ Flash Summary

Amreli Steels Limited’s (ASTL) Annual Report 2025 highlights a year marked by economic hardship and strategic adaptation. The company experienced a sharp decline in sales and gross profit due to constrained liquidity and difficulties in securing raw materials. Despite cost rationalization efforts, ASTL reported a significant net loss. Management is focused on completing a debt restructuring agreement and emphasizes financial stability while navigating external pressures. The board reiterates commitment to ethical governance and long-term value creation.

📌 Key Takeaways

• 📉 Sales revenue sharply decreased by 58.53% to PKR 16.08 billion in FY25 due to challenges in securing raw materials.
• 📉 Gross profit plummeted to PKR 76.01 million, with a gross margin of only 0.47%.
• ⚠️ Operating loss widened to PKR 1.07 billion due to lower gross margins and reduced economies of scale.
• ✅ Operating expenses were reduced to PKR 1.14 billion through cost rationalization efforts.
• ⬆️ Taxation credit of PKR 1.55 billion recognized due to deferred tax adjustments.
• ❗ Net loss stood at PKR 3.84 billion, with a loss per share of PKR 12.83.
• 🤝 Progress made towards finalizing a Master Restructuring Agreement (MRA) with lenders.
• 💼 Aims to achieve operational excellence and develop HR capital.
• 🤝 Remains committed to promoting gender diversity and equal opportunities.
• 🌱 Actively manages risks related to energy, raw materials, regulation, and the environment.
• ✨ Values Respect, Resilience, Integrity, Dynamism, and Excellence.
• 🏦 Plans to meet the country’s demand for construction steel products.
• 🚫 No cash dividend declared due to the net loss incurred.

🎯 Investment Thesis

Given the significant financial challenges and uncertainties, a HOLD recommendation is appropriate. While the debt restructuring provides a potential path to recovery, its successful implementation and a rebound in profitability are not assured. A specific price target is not provided due to the current uncertainties. Time horizon: MEDIUM_TERM, contingent on the successful turnaround.