⚡ Flash Summary

First Treet Manufacturing Modaraba (FTMM) experienced a decline in sales and profitability in FY25 compared to FY24. Sales decreased from PKR 4,148 million to PKR 3,793 million, and profit after tax significantly dropped from PKR 271 million to PKR 117 million. The major challenge seems to be from soaps segment which underperformed all year. The company is focusing on protecting its existing customer base and selectively targeting new customers amidst challenging industry conditions.

📌 Key Takeaways

• 📉 FTMM’s sales decreased to PKR 3,793 million in FY25 from PKR 4,148 million in FY24.
• 📉 Profit After Tax plummeted from PKR 271 million in FY24 to PKR 117 million in FY25.
• ⚠️ A key challenge is the underperformance of the soaps segment throughout the year.
• 🎯 The company is focusing on maintaining its current customer base.
• 🧪 Selective targeting of new customers is part of their current strategy.
• 📊 Gross Margin decreased slightly from 9% in FY24 to 9% in FY25.
• Operating Margin decreased from 5% to 4%.
• 💸 Net Profit Margin saw a decline from 7% to 3%.
• EBITDA decreased from PKR 246.283 million to PKR 188.230 million.
• 🧼 The soaps segment faces specific operational profit pressures.
• 📢 Unplanned advertisement expenses contributed to operating profit decline.

🎯 Investment Thesis

HOLD. While FTMM faces notable challenges, including decreased sales and profitability, the company is strategically focusing on existing customer retention and targeted customer acquisition. The significant decline in profit after tax needs careful monitoring and strategic measures to restore profitability. A HOLD recommendation is appropriate until clearer signs of recovery and improved performance emerge.