⚡ Flash Summary

Sapphire Textile Mills Limited (STML) reported its Corporate Briefing Presentation for 2025, highlighting an increase in standalone revenue by 13% to $93.259 million and consolidated revenue by 11% to $152.504 million. Key strategic initiatives include expanding solar power capacity by 5.38 MW, bringing the total installed capacity to 16.5 MW, and upgrading machinery through BMR investments. The company also expanded its retail operations with new international stores. However, standalone finance costs decreased 27% while consolidated decreased 24%, and profit after tax also witnessed negative growth rates.

📌 Key Takeaways

• ⬆️ Standalone revenue increased by 13% to $93.259 million.
• ⬆️ Consolidated revenue increased by 11% to $152.504 million.
• ☀️ Solar power capacity expanded by 5.38 MW, bringing total to 16.5 MW.
• 🏭 BMR investments focused on upgrading machinery in Spinning, Home Textile/Stitching, and Processing segments.
• 🛍️ Expanded retail operations internationally with new stores in the UK and UAE.
• 📉 Standalone Finance costs decreased by 27%.
• 📉 Consolidated Finance costs decreased by 24%.
• 💸 Standalone gross profit increased by 15%.
• ⚠️ Consolidated gross profit decreased by 11%.
• ⚠️ Standalone Profit after tax decreased by 24%.
• ⚠️ Consolidated Profit after tax decreased by 33%.
• 🌱 Focus on sustainable energy solutions to reduce dependency on conventional power.
• 🤝 Strengthening partnerships with international customers.
• ✅ Current ratio standalone improved from 1.31 to 1.46.

🎯 Investment Thesis

HOLD. The company’s strategic initiatives, particularly its investment in renewable energy, are positive. However, the decline in profitability and increasing challenges in the textile industry suggest a cautious approach. A price target cannot be set due to limited data. The time horizon is MEDIUM_TERM, pending further evidence of improved profitability.