⚡ Flash Summary
Habib Rice Products Ltd. reported a net loss after tax of PKR 18.36 million for the quarter ended September 30, 2025, a significant improvement compared to the net loss of PKR 57.63 million for the same period last year. This reduction in loss is attributed to growth in exports, increased local sales, reduced use of high-cost furnace oil, and higher grinding of rice. Despite these improvements, operations were still affected by escalating energy costs, rising Sorbitol imports, and the newly imposed Market Committee Fee, resulting in an overall loss for the quarter.
📌 Key Takeaways
- ✅ Net loss decreased significantly from PKR 57.63 million to PKR 18.36 million YoY.
- 📈 Sales increased from PKR 446.46 million to PKR 497.96 million YoY.
- 🌎 Export growth supported by enhanced demand.
- 🏘️ Increase in local sales due to better market outreach.
- 🔥 Reduced reliance on high-cost furnace oil, improving efficiency.
- 🍚 Higher rice grinding efficiency boosting production.
- 💧 Improved water supply contributing to smoother operations.
- ⚡ Steep increase in energy costs impacted profitability.
- ⚠️ Sorbitol imports undercutting local competitiveness.
- 💸 New Market Committee Fee adding to cost structure.
- 📉 Loss per share improved from (1.44) to (0.46).
- 📊 Trade debts increased from PKR 26.31 million to PKR 37.44 million.
- 💰 Cash and bank balances increased to PKR 18.43 million from PKR 10.93 million.
- 🏭 Capital expenditure totaled PKR 35.31 million.
🎯 Investment Thesis
HOLD. While Habib Rice Products has shown significant improvement in reducing its losses, the company is still operating at a loss. The increase in revenue and efficiency improvements are positive signs, but external factors like energy costs and regulatory burdens continue to pose challenges. A HOLD recommendation is appropriate until the company demonstrates consistent profitability and better management of operational and market risks. A price target cannot be accurately determined until profitability is consistent.
Disclaimer: AI-generated analysis. Not financial advice.