⚡ Flash Summary

Shield Corporation Limited’s annual report for the year ended June 30, 2025, reveals a challenging year with a net loss of Rs. 12.65 million and a significant decrease in net sales by 23.31% compared to the previous year. Despite the sales decline, export sales increased by 186%, offering a slight positive note. The company attributes the drop in sales to altered consumption patterns and increased price sensitivity in the market. Strategic decisions were implemented to consolidate the company’s position, including the sale of investment property and the disposal of diaper-related machinery, resulting in a non-operating gain of Rs. 285.51 million but also an Rs. 87.72 loss.

📌 Key Takeaways

• 📉 Net sales decreased by 23.31% year-over-year (YoY).
• 📈 Export sales increased significantly by 186%.
• ⚠️ The company incurred a loss after tax of Rs. 12.65 million.
• 😔 Loss per share was Rs. 3.25, compared to a loss of Rs. 92.99 in the previous year.
• ✅ Gross profit margin improved slightly, increasing by 100 bps to 23.52%.
• ✂️ Selling and distribution expenses decreased due to cost curtailment efforts.
• 💸 Finance costs decreased due to a drop in the policy rate and reduction in borrowing.
• 🏢 Investment property was sold, resulting in a non-operating gain of Rs. 285.51 million.
• 🗑️ Diaper-related machinery was disposed of, resulting in a loss of Rs. 87.72 million.
• 🚫 No dividend was proposed for the year ended June 30, 2025.
• 🌍 Baby Care and Oral Care products were successfully introduced to more markets, sales increased by 186%.
• 🤝 The company contributed Rs. 780 million to the National Exchequer in taxes and duties.

🎯 Investment Thesis

Based on the current financial performance, a HOLD recommendation is justified. Despite cost-cutting measures, revenue declines and a net loss raise concerns. However, increasing exports and a commitment to sustainability suggest potential for recovery. A price target cannot be reliably established due to a lack of financial guidance for the future, but more quantitative information may become available with further releases. A more bullish stance would depend on evidence of successful execution of strategic initiatives.