⚡ Flash Summary
Bannu Woollen Mills Limited (BNWM) reported a decrease in sales for the quarter ended September 30, 2025, with revenue dropping to Rs. 235.46 million from Rs. 321.29 million in the same period last year, primarily due to recent floods disrupting supply chains. Despite lower sales, the company improved profitability margins, increasing gross profit to Rs. 103.62 million from Rs. 100.20 million, thanks to enhanced operational efficiency and cost control. Earnings per share (EPS) increased to Rs. 2.49 from Rs. 2.22, reflecting continued value creation for shareholders. Management remains optimistic about sales recovery and sustained growth as post-flood conditions improve.
📌 Key Takeaways
- 📉 Sales declined to Rs. 235.46 million from Rs. 321.29 million year-over-year due to flood-related disruptions.
- 📈 Gross profit improved to Rs. 103.62 million from Rs. 100.20 million, indicating better operational efficiency.
- Operating profit decreased to Rs. 51.70 million from Rs. 57.04 million in the prior year.
- 💰 Finance costs significantly reduced to Rs. 14.52 million from Rs. 26.14 million due to better financial management.
- ✅ Profit before tax increased to Rs. 37.18 million from Rs. 30.91 million.
- ✅ Profit after tax increased to Rs. 23.67 million from Rs. 21.10 million.
- 💵 Earnings per share (EPS) rose to Rs. 2.49 from Rs. 2.22.
- 🏭 Fabric production increased to 228,829 meters from 179,405 meters year-over-year.
- ⚠️ The company faces challenges from elevated raw material and energy costs.
- 🎯 Management aims to enhance sales and profitability through efficient operations and cost management.
- 💹 The economic outlook for Pakistan reflects gradual stabilization, which may support future growth.
- Reserves decreased slightly to 3,058.14 million from 3,133.04 million YoY.
- Cash and bank balances increased to 13.49 million from 3.32 million YoY.
- Commitments for irrevocable letters of credit outstanding is nil.
🎯 Investment Thesis
I recommend a HOLD rating for Bannu Woollen Mills. While the company has shown resilience in managing profitability despite sales declines, the dependence on favorable post-flood conditions for future growth introduces uncertainty. The increased EPS and net profit are encouraging, but the lower sales volume tempers enthusiasm. A price target cannot be assigned due to a lack of sufficient sector valuation data.
Disclaimer: AI-generated analysis. Not financial advice.