⚡ Flash Summary

Reliance Weaving Mills Limited’s Corporate Briefing Session on November 20, 2025, reveals a mixed financial performance. While sales decreased slightly by 3% to PKR 40,220 million, net profit significantly increased by 115% to PKR 257 million. EPS also saw a substantial rise of 115% to PKR 8.34. The company is focusing on cost-saving measures like installing renewable solar systems and automating AC plants to improve profitability and sustainability.

📌 Key Takeaways

• 📉 Sales decreased by 3% from PKR 41,461 million to PKR 40,220 million.
• 💰 Gross profit decreased by 3% from PKR 4,842 million to PKR 4,703 million.
• 📊 Gross profit margin remained relatively stable at 11.69% compared to 11.68% in the previous year.
• 📉 EBITDA decreased by 8% from PKR 4,754 million to PKR 4,350 million.
• ✅ Net profit increased significantly by 115% from PKR 120 million to PKR 257 million.
• 📈 Net profit margin improved from 0.29% to 0.64%.
• 🚀 EPS increased by 115% from PKR 3.88 to PKR 8.34.
• 💼 No dividend was declared for both 2025 and 2024.
• 🌱 The company installed a 20 MW renewable solar system and plans to add 3 MW more.
• 💡 Automation of AC Plant is expected to save Rs.150 M per annum.
• 🔄 Replacing 33 low RPM looms with high RPM looms is projected to cost Rs.600 M but yield Rs.170M annually.
• 📉 KIBOR reduction from 23% to 11.25% resulted in savings of Rs.521 M.
• ⬆️ Total assets increased by 13% from PKR 34,864 million to PKR 39,270 million.
• ⬆️ Non-Current Liabilities increased by 55% from PKR 5,181 million to PKR 8,014 million.

🎯 Investment Thesis

HOLD. While the improved profitability metrics are encouraging, the slight revenue decline and external risks warrant a cautious approach. The company’s focus on cost-saving measures and renewable energy initiatives provide some upside potential, but these need to materialize into sustained earnings growth. A HOLD recommendation is appropriate until the company demonstrates consistent top-line growth and manages its operational risks effectively.