⚡ Flash Summary
Fazal Cloth Mills Limited’s (FCML) 2025 annual report reveals a challenging year marked by a decrease in revenue and net profit. Revenue declined to Rs. 90.002 billion from Rs. 97.161 billion, primarily due to reduced local demand and increased energy costs. Net profit plummeted by 93.44% to Rs. 117 million from Rs. 1,785 million in the previous year. Despite these challenges, the company managed to navigate the difficult economic environment and is implementing strategies to improve operations and deliver sustainable returns.
📌 Key Takeaways
- 📉 Revenue decreased by 7.37% YoY, from Rs. 97.161 billion to Rs. 90.002 billion.
- ⚠️ Net profit after taxation declined drastically by 93.44%, from Rs. 1,785 million to Rs. 117 million.
- 🔻 Earnings per share (EPS) decreased by 93.44%, from Rs. 59.51 to Rs. 3.90.
- Gross profit saw a significant decline of 30.14%, from Rs. 11,016.97 million to Rs. 7,696.75 million.
- 🚧 EBIDTA decreased by 31.45%, from Rs. 13,385.82 million to Rs. 9,175.44 million.
- ⬆️ Depreciation increased slightly by 3.19%, from Rs. 2,222.503 million to Rs. 2,293.297 million.
- 📉 Finance costs decreased by 36.72%, from Rs. 8,337.428 million to Rs. 5,276.230 million.
- 🚫 No dividend was recommended for the year.
- 🏭 Large-Scale Manufacturing (LSM) sector registered a YoY increase of 4.1% in June 2025, but cumulatively declined by 0.74% during FY2025.
- 🇵🇰 SBP reduced policy rates by a cumulative 850 basis points to 11%, which alleviated financial pressure on industries.
- 🤝 Recently, a trade agreement between Pakistan and the U.S. reduced tariffs on Pakistani exports from 29% to 19%.
- 📉 Pakistan’s cotton production for 2025-26 is expected to decrease significantly due to monsoon damage and virus attacks.
🎯 Investment Thesis
Given the significant decline in profitability, challenging industry conditions, and various risk factors, a HOLD recommendation is appropriate. The price target is speculative and would depend on a broader market recovery in the Pakistani market, sector recovery, and demonstration of sustained improvement in profitability and operational efficiency. There is no given time horizon.
Disclaimer: AI-generated analysis. Not financial advice.