⚡ Flash Summary
Service Industries Textiles Limited reported a net revenue increase from Rs. 1.341 Billion to Rs. 1.371 Billion for the year ended June 30, 2025. Despite this slight revenue growth, the company incurred a net loss of Rs. 72.900 Million, an improvement from the previous year’s net loss of Rs. 100.644 Million. The company attributes its struggles to the dumping of imported yarn in the local market, high fuel and energy costs, and poor quality of local cotton. To mitigate high energy costs, the company has invested in solar energy and plans to expand these efforts.
📌 Key Takeaways
- ⬆️ Net revenue increased slightly to Rs. 1.371 Billion from Rs. 1.341 Billion YoY.
- 📉 Net loss improved to Rs. 72.900 Million from Rs. 100.644 Million YoY, but is still a significant loss.
- ⚠️ Gross profit was Rs. 5.593 Million, a turnaround from a gross loss of Rs. 35.239 Million YoY.
- ❌ EPS is negative at Rs. (5.29) compared to Rs. (7.26) in the prior year.
- 🏭 Local yarn market faces pressure from cheaper imported yarn.
- ⚡ High fuel and energy costs persist, almost twice the regional average.
- ☀️ Solar energy investments undertaken to offset energy costs.
- 📉 Poor local cotton quality remains a challenge.
- ⛔ No dividend declared due to losses.
- 📅 AGM scheduled for October 28, 2025.
- 🗳️ Election of seven directors to be held at the AGM.
- 🌐 Financial statements available on the company’s website.
- ⚖️ Auditors raise concerns about the company’s ability to continue as a going concern.
- 🤝 Directors committed to injecting funds if required.
🎯 Investment Thesis
HOLD. While the company is making efforts to improve its financial situation, ongoing losses and significant risks warrant a cautious approach. Without a clear path to profitability and a more stable operating environment, an upgrade is not justified. The improved, yet still negative, EPS does not yet merit a BUY rating.
Disclaimer: AI-generated analysis. Not financial advice.