⚡ Flash Summary

Dewan Automotive Engineering Limited reports a challenging quarter ending September 30, 2025. The company experienced a gross loss of PKR 3.015 million, slightly improved from PKR 3.297 million in the same period last year. Loss after taxation remained substantial at PKR 12.831 million, compared to PKR 11.849 million last year. The company’s operations are severely constrained by a lack of working capital, hindering its ability to meet sales targets despite the resumption of operations by a key sister concern.

📌 Key Takeaways

• 📉 Gross loss reported at PKR 3.015 million for the quarter ended September 2025.
• 📉 Loss after taxation increased to PKR 12.831 million from PKR 11.849 million year-over-year.
• ⚠️ Operations are significantly hampered by a severe shortage of working capital.
• 🚗 Sales of passenger vehicles in the auto industry fell by over 20% due to weak consumer demand.
• ✅ Commercial vehicles segment remained stable due to infrastructure and logistics projects.
• ℹ️ Inflation relaxed to 3%-4%, and industry growth accelerated to almost 9% year-on-year.
• 🏢 The company’s current liabilities exceed its current assets by PKR 1,748.86 million.
• ⛔ Company is unable to ensure payments to creditors due to liquidity problems.
• 👍 Management believes funds can be arranged from associated companies.
• 🔒 The company has not recognized deferred tax assets of Rs.215.512 million due to uncertainty regarding future taxable profits.
• 🤝 Transactions with related parties, including Dewan Mushtaq Motors, continue in the normal course of business.
• 🗓️ These financial statements were authorized for issue on October 29, 2025.

🎯 Investment Thesis

Given the significant financial challenges and operational constraints, a SELL recommendation is warranted. The company’s negative equity, persistent losses, and dependence on external funding sources create a high-risk investment profile. There is no price target.