⚡ Flash Summary

KHYT’s corporate briefing session for FY2025 reveals a company in transition. Textile operations remain halted due to ongoing banking litigation and credit restrictions. The company has shifted its focus to agricultural livestock and renting vacant buildings, which are generating positive returns and increased revenue/cash flow in FY2025. Despite these positive developments, KHYT recorded a net loss due to depreciation on idle plant and equipment; however, management asserts the company remains solvent.

📌 Key Takeaways

• 🏭 Textile operations remain suspended due to banking litigation.
• 🌾 Agricultural livestock business is now the primary revenue source.
• 🏢 Renting of vacant buildings contributes additional income.
• 💰 Revenue increased in FY2025 to PKR 20.684 million from PKR 18.355 million in FY2024.
• 💸 Cash flow increased in FY2025.
• 📉 Net loss reported due to depreciation of idle assets.
• ✅ Company states it remains solvent despite the net loss.
• 🌱 BOD approved alternative business activities for the Company.
• 🏦 Banking litigation poses a long-term risk.
• 🚧 Credit restrictions limit operational flexibility.
• 📍 Company is located 4 kms from the CPEC interchange.
• 🎯 Management intends to revive the textile unit once litigation is resolved.

🎯 Investment Thesis

Given the ongoing challenges with banking litigation and the current net loss, I recommend a HOLD rating on KHYT. While the shift to agricultural business is promising, more evidence of consistent profitability is needed before considering a BUY. A price target cannot be reliably established without further information.