⚡ Flash Summary

Kohinoor Mills Limited (KML) released its annual report for the year ended June 30, 2025. The company reported a decrease in revenue but managed to turn around its bottom line from a net loss last year to a net profit this year. Key challenges included elevated input and energy costs, along with lingering supply constraints and global economic uncertainties, impacting margins. Despite these headwinds, KML is focusing on value-added segments and operational efficiencies.

📌 Key Takeaways

• 📉 Revenue decreased by 9.1% to PKR 27.14 billion from PKR 29.85 billion YoY.
• ✅ Turned profitable, reporting a net profit of PKR 233.51 million compared to a net loss of PKR 19.6 million last year.
• 💲 Basic and diluted EPS stood at PKR 0.46, a significant improvement from the LPS of Re. 0.04 last year.
• 🚧 Gross profit margin declined to 13.32% due to rising input and utility costs.
• 💰 Finance cost declined significantly to PKR 1.18 billion from PKR 1.72 billion driven by policy rate cuts.
• 🌱 Pakistan’s textile exports experienced 6.16% growth in FY25, demonstrating modest recovery.
• 🏭 Weaving division demonstrated improved operational efficiency with gross profit of PKR 1.71 billion.
• 🔥 Dyeing division impacted by elevated operational costs, supply chain issues, and e-commerce rivalry.
• ⚡ Genertek division commissioned a 4.5 MW solar plant, aiming to meet over 20% of the company’s operational electricity needs.
• 🤝 Company is focused on strengthening traceability, compliance and eco-friendly manufacturing practices.
• 👗 Establishing apparel unit with initial capacity of 5 million garments, starting production Q2 FY26.
• 🧪 Strong focus on traceability and chemical management practices for sustainable production.
• ⚖ Proposed a policy framework for determining remuneration of directors and senior management.

🎯 Investment Thesis

HOLD: Improved profitability is a positive, BUT the lower revenue and market conditions raise concerns. Wait for further improvement in sales and macro conditions before considering a BUY rating. PT: Dependent on future performance; re-evaluate in 6 months.