⚡ Flash Summary

Ideal Spinning Mills Limited’s unaudited financial results for the quarter ended September 30, 2025, show a significant improvement compared to the same period last year. The company reported a profit after taxation of PKR 5.656 million, a stark contrast to the loss of PKR 52.907 million in the previous year. Earnings per share increased to PKR 0.57 from a loss of PKR 5.33 per share. Management expresses optimism about sustaining this positive trajectory through strategic planning and efficient resource utilization.

📌 Key Takeaways

• ✅ Revenue decreased significantly to PKR 356.861 million from PKR 1,239.898 million year-over-year.
• 📈 Gross profit decreased to PKR 60.565 million, compared to PKR 107.579 million in the prior year.
• 📉 Distribution costs decreased to PKR 20.781 million from PKR 33.612 million year-over-year.
• 📉 Administrative expenses decreased slightly to PKR 63.089 million from PKR 65.979 million.
• ✨ Other income increased dramatically to PKR 51.270 million from PKR 6.050 million year-over-year.
• 📉 Finance costs decreased to PKR 17.415 million from PKR 54.363 million year-over-year.
• 📈 Profit before taxation and levy turned positive at PKR 9.513 million compared to a loss of PKR 40.910 million in the prior year.
• ✅ Levy decreased to PKR 3.857 million from PKR 11.997 million year-over-year.
• 📈 Profit after taxation was PKR 5.656 million compared to a loss of PKR 52.907 million in the previous year.
• 📈 Earnings per share (EPS) improved to PKR 0.57 from a loss of PKR 5.33 in the prior year.
• 🏦 Short term borrowings decreased slightly from PKR 1,788.458 million to PKR 1,664.704 million.
• 💰 Cash and bank balances increased to PKR 48.206 million from PKR 41.724 million since June 30, 2025.
• 🏭 Operating fixed assets decreased to PKR 1,364.417 million from PKR 1,560.290 million since June 30, 2025.

🎯 Investment Thesis

Based on the Q1 report, I recommend a HOLD rating for Ideal Spinning Mills. The turnaround from a loss to a profit is encouraging, but revenue decline and reliance on ‘other income’ raise concerns about sustainability. A ‘BUY’ rating would require more consistent performance and revenue growth. A ‘SELL’ rating would be warranted if the ‘other income’ proves to be a one-time event. Price Target: PKR 15 (based on projected EPS with industry P/E ratio). Time Horizon: 12 months.