⚡ Flash Summary

The Crescent Textile Mills Limited reported a mixed financial performance for the year ended June 30, 2025. Revenue declined by 20% to Rs. 19,004 million, but gross profit increased by 25% to Rs. 1,704 million due to a shift towards margin-oriented customers. However, the company faced challenges including rising energy costs, minimum wage rates, and other macroeconomic factors that collectively constrained its overall financial performance, resulting in a net loss after tax of Rs. 287 million. The Board does not recommend any dividend for the year.

📌 Key Takeaways

• 📉 Revenue decreased by 20% to Rs. 19,004 million due to declined sales.
• 📈 Gross profit increased by 25% to Rs. 1,704 million through margin fetching margin-oriented customers.
• ⚠️ Net margins were pressured by rising energy costs, minimum wage rates, and macroeconomic factors.
• ❌ Net loss after tax was Rs. 287 million, compared to a loss of Rs. 1,750 million in the previous year.
• 📉 Export topline decreased by 38%, but sales margins improved.
• 📈 Local sales increased, but margins remain depressed.
• 💰 Selling and distribution costs decreased by 31%, primarily due to lower export volumes.
• 📈 Other income increased by Rs. 127 million due to exchange gains.
• 📉 Finance cost decreased by 29% due to SBP policy rate reductions.
• ➕ Asset base increased by Rs. 2,382 million, improving financial strength.
• ▶️ The Board does not recommend any dividend for the year.
• ⚡️ Enhanced processing capacity by adding digital printing machine and waste heat boiler.

🎯 Investment Thesis

HOLD. Mixed financial performance reflects top-line challenges but improvements in operational efficiency. The absence of dividend payments will not entice shareholders to invest further, but no sell off should occur given a reduction in the previous year’s losses. Challenging to give a specific price target.