⚡ Flash Summary
Dadex Eternit Limited’s Q1 2025-26 financial results reveal a mixed performance. Net sales decreased by 7.70% to Rs. 205.699 million compared to the same period last year. Despite the sales decline, the company successfully reduced financial liabilities and narrowed operating losses. The loss per share improved, reflecting positive trajectory despite the net loss. Management remains focused on operational efficiencies and strategic initiatives to enhance financial standing.
📌 Key Takeaways
- 📉 Net sales decreased by 7.70% to Rs. 205.699 million (Q1 2025-26) from Rs. 222.869 million (Q1 2024-25).
- ⚠️ Decline in sales adversely impacted gross profit margin due to relative increase in cost of sales.
- ✅ Financial liabilities reduced from Rs. 36.899 million to Rs. 22.466 million.
- 👍 Lower borrowing costs and effective cash flow management supported reduction in financial liabilities.
- 📉 Operating losses narrowed to Rs. 47.559 million (Q1 2025-26) from Rs. 53.128 million (Q1 2024-25).
- ⬆️ Exchange gains arising from Pak Rupee depreciation contributed to narrowing operating losses.
- ⬇️ Financial costs declined by 39.11% compared to the previous year.
- 📉 Net loss before taxation reduced to Rs. 70.025 million (Q1 2025-26) from Rs. 90.027 million (Q1 2024-25).
- ⬆️ Loss per share improved to Rs. 7.03 from Rs. 8.88 in the corresponding period last year.
- 💪 Management focused on operational efficiencies, cost control measures, and strategic initiatives.
- 🌱 Efforts underway to enhance productivity, streamline expenses, and recover growth momentum.
- 🏦 Short term borrowings decreased from 651.426 million to 640.468 million
- ✨Positive trajectory and improved performance
- 🤝 The Board acknowledged the dedication and efforts of the management team and employees
🎯 Investment Thesis
Given the current financial performance, I recommend a HOLD rating for Dadex. While the reduction in financial liabilities and narrowing of operating losses show promise, the company still faces significant challenges in achieving profitability. The price target reflects current negative EPS and lack of forward guidance. Any substantial changes in these areas would require a new price target to be calculated. Given ongoing business environment and company initiatives to improve the business, the price target horizon is medium term.
Disclaimer: AI-generated analysis. Not financial advice.