⚡ Flash Summary

Shadman Cotton Mills Limited reports a mixed Q1 2025. Revenue decreased significantly to Rs. 75.59 million from Rs. 127.299 million in the same period last year, attributed to lower output in the apparel division. However, the company turned profitable with an after-tax profit of Rs. 9.481 million compared to a loss of Rs. (27.275) million in the previous year. Earnings per share (EPS) also improved to Rs. 0.54 from a loss per share of Rs. (1.55).

📌 Key Takeaways

• 📉 Revenue declined to Rs. 75.59 million from Rs. 127.299 million YoY.
• ✅ Swung to profit: Rs. 9.481 million profit vs. Rs. (27.275) million loss YoY.
• ⬆️ EPS improved to Rs. 0.54 from Rs. (1.55) YoY.
• 🏭 Apparel division output decrease impacted revenue.
• ⚠️ High raw material and power costs affected profitability.
• 🌍 Economic challenges like inflation and high energy prices persist.
• 💼 Management focusing on other segments to improve performance.
• 💪 Expectation of positive financial performance for the rest of the year.
• 🤝 Commitment to improve financial results through hard work.
• 🤝 Out-of-court settlement for long-term financing with The Bank of Punjab

🎯 Investment Thesis

HOLD. While the company has shown improvement in profitability, the decrease in revenue and persistent economic challenges warrant caution. A BUY rating is not justified until revenue growth is demonstrated. A SELL rating is not appropriate given the improved profitability. A hold rating with price target of 20 in the short term.