⚡ Flash Summary

Nishat Chunian Limited (NCL) reported its financial results for the quarter ended September 30, 2025. The company experienced a decrease in revenue compared to the same period last year, but managed to significantly increase its profit after taxation. Earnings per share also saw a substantial rise, driven by operational efficiencies and potentially other income. However, investors should be cautious as cash flow from operations is negative.

📌 Key Takeaways

• 📉 Revenue decreased slightly to PKR 22.94 billion from PKR 23.33 billion year-over-year.
• ⬆️ Gross profit increased to PKR 2.65 billion, up from PKR 2.18 billion in the previous year.
• 💰 Other operating income decreased substantially to PKR 109.07 million from PKR 315.15 million year-over-year.
• 💸 Finance costs decreased to PKR 1.198 billion, compared to PKR 1.465 billion in the prior year.
• 📊 Profit before levy and taxation rose significantly to PKR 803.28 million from PKR 328.90 million year-over-year.
• ✔️ Profit after taxation saw a substantial increase to PKR 516.16 million from PKR 36.78 million in the previous year.
• 📈 Earnings per share (EPS) increased significantly to PKR 2.15 from PKR 0.15 year-over-year.
• ⚠️ Cash generated from operations is negative at PKR (6.337) billion compared to PKR 3.096 billion last year.
• Borrowings are up. Short term borrowings-net increased from (55.221) million to PKR 8,675 million.
• Trade debts increased from PKR 12.53 billion to PKR 13.23 billion.
• Stock in trade increased from PKR 30.83 billion to PKR 40.58 billion.
• Long term financing is nearly flat at PKR 7.54 billion vs PKR 7.99 billion.

🎯 Investment Thesis

I recommend a HOLD rating on Nishat Chunian. The improved profitability and EPS are encouraging, but the negative operating cash flow and reliance on factors like reduced finance costs raise sustainability concerns. A price target cannot be accurately determined without further information and clarification on the cash flows. The time horizon is medium-term, contingent on observing improved cash flow management and consistent operating performance.