⚡ Flash Summary

Gadoon Textile Mills Limited (GADT) reported steady revenue growth of 8.46%, reaching Rs. 19.72 billion for the quarter ended September 30, 2025. However, gross margins were pressured by increased conversion costs and lower yarn prices due to imported yarn availability. Consequently, net profit decreased to Rs. 561.27 million from Rs. 583.92 million in the same period last year. The company emphasizes its commitment to sustainability through various CSR activities, including a tree plantation drive and collaboration with the ChildLife Foundation.

📌 Key Takeaways

• ⬆️ Revenue increased by 8.46% YoY, reaching Rs. 19.72 billion.
• 📉 Net profit decreased to Rs. 561.27 million from Rs. 583.92 million YoY.
• ⚠️ Gross margins were under pressure due to increased conversion costs and lower yarn prices.
• 🏭 Distribution costs increased by 31.60% due to higher volumes and logistic charges.
• 🏢 Administrative expenses increased by 21.49% primarily due to inflationary impact.
• 💰 Finance costs increased slightly by 1.60% to Rs. 729.36 million.
• 📉 Earnings per share (EPS) decreased to Rs. 20.02 from Rs. 20.83 YoY.
• 🌱 Company undertook a large-scale tree plantation drive.
• 🤝 Collaborated with ChildLife Foundation to support the healthcare sector.
• 🧵 Cotton prices declined, leading to a reduction in yarn prices.
• 📈 Domestic cotton arrivals have been significantly higher compared to the same period last year (SPLY).
• 📊 Import bills increased by 13.49% to USD 16.97 billion, while exports decreased by 3.83% to USD 7.603 billion.
• 💸 Remittances surged by 8.68% to USD 9.535 billion, supporting the current account.
• 🏦 The State Bank of Pakistan (SBP) decided to keep the policy rate unchanged at 11%.

🎯 Investment Thesis

HOLD. While GADT shows revenue growth, the decreased net profit and margin pressures raise concerns. Further efficiency and cost management improvements are needed to improve profitability. A HOLD rating is appropriate until clearer trends emerge. Price Target: Rs. 21.00. Upside of 4.8%.