⚡ Flash Summary

Reliance Cotton Spinning Mills Limited (RCSML) announced its Corporate Briefing Presentation for 2025. The company invested Rs. 577 million in plant and machinery during the year. Sales increased to Rs. 15.816 billion, up from Rs. 15.069 billion in 2024. Net profit, however, decreased significantly to Rs. 708 million from Rs. 1,315 million in the previous year, impacting profitability margins.

📌 Key Takeaways

• ✅ RCSML’s total installed capacity is 59,232 spindles (44,590,590 Lbs.).
• 🏭 The company invested Rs. 577 million in plant and machinery.
• 📈 Total sales increased to Rs. 15.816 billion from Rs. 15.069 billion, a 4.96% increase.
• 📉 Gross profit decreased to Rs. 1.932 billion from Rs. 2.237 billion, a 13.64% decrease.
• 📉 Net profit decreased to Rs. 708 million from Rs. 1.315 billion, a 46.2% decrease.
• 📊 Gross profit margin decreased from 14.84% to 12.21%.
• 📊 Net profit margin decreased from 8.72% to 4.47%.
• 💰 Dividend paid increased to Rs. 64 million from Rs. 41 million, a 56% increase.
• 💸 Breakup value per share increased to Rs. 881 from Rs. 839, a 5% increase.
• 🏢 Total Assets increased to Rs. 18.998 million from Rs. 17.724 million.
• 🏦 Shareholder equity increased to Rs. 9.379 million from Rs. 8.631 million.
• ⬆️ Consolidated sales reached Rs. 17.836 billion compared to Rs. 15.069 billion in the prior year.
• ⚠️ Finance costs decreased from Rs. 970 million to Rs. 643 million.
• 🌱 Profit after taxation increased to Rs. 2.921 billion from Rs. 1.637 billion.
• Looking forward, management focuses on strengthening the company’s future by driving innovation, enhancing operational efficiency, and maintaining financial discipline.

🎯 Investment Thesis

Given the decreased profitability and uncertainties in the textile industry, a HOLD recommendation is appropriate. While revenue has increased and the company is investing in its operations, the declining profit margins need to be addressed. Investors should monitor RCSML’s ability to improve its profitability and manage costs effectively before considering a BUY rating. Price target: remain at current levels. Time horizon: Medium Term.