⚡ Flash Summary

KTML’s financial performance for the quarter ended September 30, 2025, showed mixed results. Sales increased slightly by 1.6% to Rs. 15,389 million, but operating profit decreased from Rs. 1,573 million to Rs. 1,413 million. However, after-tax profit saw a significant increase to Rs. 665 million (2024: Rs. 518 million), leading to higher earnings per share of Rs. 0.49 (2024: Rs. 0.38). The company is navigating challenges in yarn sales due to imports and high tariffs in the US by diversifying its product base and expanding marketing efforts.

📌 Key Takeaways

• 👍 Sales increased by 1.6% to Rs. 15,389 million (2024: Rs. 15,140 million).
• 👎 Cost of sales increased by 1.9% to Rs. 12,958 million (2024: Rs. 12,712 million).
• 👌 Gross profit remained relatively stable at Rs. 2,431 million (2024: Rs. 2,428 million).
• 😞 Operating profit decreased to Rs. 1,413 million (2024: Rs. 1,573 million).
• 🚀 After-tax profit increased significantly to Rs. 665 million (2024: Rs. 518 million).
• 💰 Earnings per share increased to Rs. 0.49 (2024: Rs. 0.38).
• 🏭 Spinning division saw improvements due to reduced cotton prices.
• 📉 Weaving division held steady due to expanded marketing and higher value products.
• 🤕 Home Textiles division suffered due to high tariffs in the US; diversifying marketing efforts to offset.
• ☀️ Solar power expansions are up and running, showcasing a commitment to sustainability.
• 🌱 Biofuel boiler is running successfully, reducing the carbon footprint.
• 🧶 Company is investing in the preparatory department of the Gujar Khan division to diversify product base.
• 🔄 Company is planning to upgrade and replace its oldest looms in the weaving division.
• 🌐 Raw materials have been purchased at competitive prices internationally.
• 🤝 Directors acknowledge the support from members, financial institutions, customers, and employees.

🎯 Investment Thesis

HOLD. While KTML shows improved after-tax profitability due to reduced finance costs, there are operational headwinds such as import competition and challenges in the Home Textiles division. Diversification efforts and sustainability initiatives could enhance long-term value, but near-term performance may be volatile.