⚡ Flash Summary

Yousaf Weaving Mills Limited (YOUW) reported a challenging fiscal year ending June 30, 2025. The company faced significant headwinds including inflation, economic instability, and high energy prices which negatively impacted its operational performance. Sales revenue decreased substantially to Rs 528 million from Rs 640 million in 2024, and the company incurred a significant loss after tax of Rs (306.714) million. Management is implementing a BMR program to modernize machinery and improve efficiency, expecting this to enhance long-term profitability.

📌 Key Takeaways

• 📉 Sales revenue decreased from Rs 640 million in 2024 to Rs 528 million in 2025.
• 💔 Operating profit declined from a loss of Rs (38) million in 2024 to a loss of Rs (295) million in 2025.
• ⚠️ Net loss after tax widened significantly from Rs (49) million in 2024 to Rs (306.714) million in 2025.
• 💸 Loss per share deteriorated from Rs (0.39) in 2024 to Rs (2.26) in 2025.
• 📉 Return on equity plummeted from (10)% in 2024 to (113)% in 2025.
• 🏢 Equity increased from Rs 270 million to Rs 499 million.
• 🏭 Weaving and spinning production volume decreased as seen in the provided graph.
• 🧑‍💼 Number of employees decreased from 351 to 389.
• 🏦 Current ratio decreased to 0.31:1 in 2025 from 0.51:1 in 2024, indicating liquidity issues.
• ⚙️ Management is implementing a BMR program to enhance operational efficiency.
• ⚡ Exorbitant energy prices and economic instability are major challenges.

🎯 Investment Thesis

Based on the analysis, a SELL recommendation is warranted for YOUW. The company’s financial performance has deteriorated significantly, and faces numerous challenges that are unlikely to be resolved quickly. Without substantial improvements in operational efficiency and market conditions, YOUW’s stock price is likely to decline further. Therefore a SELL is appropriate until a turnaround is apparent.