⚡ Flash Summary

Din Textile Mills Limited (DTML) released its 38th Annual Report for the year ended June 30, 2025. The company navigated challenging market conditions, reducing its net loss significantly by 89.9% to Rs. 230.57 million. This was achieved through strategic cost-containment measures and a focus on higher-realization, value-added finished cotton products. Management expresses cautious optimism, awaiting stable government policies and a gradual improvement in the global economy.

📌 Key Takeaways

• 📉 Net loss significantly reduced by 89.9% from Rs. 2,282.36 million to Rs. 230.57 million.
• ⬆️ Gross profit increased by 30.66% to Rs. 3,741.64 million.
• ➡️ Revenue remained consistent at Rs. 40.12 billion.
• 📉 Finance costs decreased by 23.72% to Rs. 3,039.37 million.
• 📉 Loss per share improved from (Rs. 52.77) to (Rs. 13.47).
• ✅ Maintained PACRA credit rating despite economic stress.
• ☀️ Investments in renewable energy projects continue.
• 🌱 Commitment to sustainable practices is ongoing.
• 🤝 Relationships with financial partners remain strong.
• 🏭 Expansion plans for home textile stitching unit are underway, expected to double production capacity by December 2025.
• 🔒 Zero-rating on yarn/fabric imports restored under Export Facilitation Scheme.
• ⚠️ SBP policy rate decreased from ≈22.00% to ≈11.00%.
• 🌎 Global demand shows slow, fragile recovery.
• ⚡ Energy costs remain extremely high and uncompetitive.

🎯 Investment Thesis

Based on the analysis, a HOLD recommendation is warranted. While DTML has made commendable progress in reducing losses and improving efficiency, the company is still not profitable and faces significant challenges. A BUY recommendation would require evidence of sustained profitability, a stable economic environment, and favorable government policies. The expected turnaround and expansion activities are yet to yield concrete results. Revisit the HOLD after seeing results in future Q results.