⚡ Flash Summary

First Punjab Modaraba’s financial results for the period ended September 30, 2025, reveal a challenging period with a net loss of PKR 126.47 million, a stark contrast to the profit of PKR 20.19 million in the same period last year. The company’s operating loss before management company’s fee was PKR 123.75 million. This downturn is primarily attributed to increased finance costs and provisions for musharakah arrangements. Despite the loss, the company received PKR 2 billion in subordinated funds, significantly bolstering its equity position.

📌 Key Takeaways

• 📉 **Net Loss:** The company reported a net loss of PKR 126.47 million for the nine months ended September 30, 2025, compared to a profit of PKR 20.19 million in the same period last year.
• 💸 **Revenue Decline:** Income from ijarah rentals decreased to PKR 23.44 million from PKR 51.38 million year-over-year.
• 📈 **Finance Cost Increase:** Finance costs surged to PKR 254.20 million from PKR 277.44 million YoY.
• 💰 **Operating Loss:** Operating loss before management company’s fee was PKR 123.75 million.
• ⚠️ **Provisioning Impact:** Provision for musharakah arrangement increased to PKR 4.19 million.
• ⬆️ **Subordinated Funds:** Received PKR 2 billion in subordinated funds, up from PKR 500 million last year.
• 🔻 **EPS Decline:** (Loss)/Earnings per Certificate is (3.72) compared to 0.59 last year.
• 🏦 **Cash Position:** Cash and bank balances increased significantly to PKR 240.34 million from PKR 23.08 million, influenced by subordinated funds.
• ⬇️ **Total Income Decrease**: Total Income decreased to PKR 193.99 million from PKR 342.53 million YoY.
• 📉 **Certificate Holders’ Equity**: Certificate Holders’ Equity stands at PKR 1.58 billion compared to PKR 208.00 million December 31, 2024.
• 🔻 **Non-current assets decrease:** Non-current assets decreased to PKR 820.97 million from PKR 982.23 million as of December 31, 2024.

🎯 Investment Thesis

Given the current financial performance, a **SELL** recommendation is warranted. The company is currently loss-making with significant challenges in revenue generation and expense management. Although the infusion of subordinated funds provides some stability, it does not address the core issues of profitability. The price target rationale will be more relevant once profitability and appropriate valuations are feasible. A **LONG_TERM** time horizon is more applicable, contingent on a successful turnaround strategy.