⚡ Flash Summary

Sitara Energy Limited reported a mixed performance for the quarter ended September 30, 2025. While the company achieved a profit of PKR 1.860 million compared to a loss of PKR 50.934 million in the same period last year, sales decreased significantly from PKR 57.416 million to PKR 7.967 million. This profit turnaround was primarily driven by a substantial increase in other income, which offset the negative impact of lower sales and higher cost of generation. The company did not declare any interim cash dividend, bonus shares, or right shares for the period.

📌 Key Takeaways

• 📉 Sales plummeted to PKR 7.967 million, a sharp decline from PKR 57.416 million in Q1 2024.
• 🔥 Cost of generation exceeded sales, reaching PKR 10.221 million, contributing to a gross loss of PKR 2.254 million.
• 💰 Other income surged to PKR 31.596 million, offsetting the gross loss and boosting profitability.
• ⚙️ Operating expenses decreased to PKR 29.342 million, compared to PKR 4.236 million in Q1 2024.
• 💸 Finance costs reduced to PKR 15.867 million from PKR 19.051 million year-over-year.
• ✅ The company achieved a profit of PKR 1.860 million, a significant improvement from a loss of PKR 50.934 million in the previous year.
• 🧾 Basic and diluted loss per share improved to a profit of PKR 0.10 compared to a loss of PKR 2.67 in Q1 2024.
• 🚫 No interim cash dividend, bonus shares, or right shares were declared.
• 🏦 Long-term financing remained stable at PKR 150.471 million.
• 🧾 Trade and other payables increased to PKR 659.150 million from PKR 623.792 million.
• 🏦 Cash and bank balances decreased to PKR 4.609 million from PKR 25.961 million.
• ✔️ Total equity increased to PKR 1,340.755 million as of September 30, 2025, compared to PKR 1,338.895 million as of June 30, 2025.
• ✔️ Retained earnings (unappropriated loss) increased to PKR 36.645 million, from PKR 34.785 million as of June 30, 2025.

🎯 Investment Thesis

Given the significant drop in sales and reliance on non-core income, a HOLD rating is appropriate for Sitara Energy. While the company achieved profitability for the quarter, the long-term sustainability of this performance is uncertain. A turnaround in core operations is needed to justify a more positive outlook. Investors should closely monitor sales trends, the composition of ‘other income,’ and any strategic initiatives aimed at revitalizing the company’s core energy business.