⚡ Flash Summary

Shahtaj Textile Limited reported a decrease in net sales for the year ended June 30, 2025, with revenue declining by 16.8% from Rs 7.953 billion to Rs 6.620 billion. Despite the revenue decline, the company managed to increase its after-tax profit to Rs 110.983 million, resulting in an EPS of Rs 11.49, compared to Rs 2.81 in the previous year. This improvement in profitability was attributed to a focus on sales orders against weaving charges and reductions in finance costs. The company has also focused on green initiatives adding 1MW of solar power last year and 3.3 MW this year.

📌 Key Takeaways

• 1. 📉 Net sales decreased by 16.8% YoY from Rs 7.953 billion to Rs 6.620 billion.
• 2. 📈 Profit after tax increased to Rs 110.983 million from Rs 27.192 million YoY.
• 3. 🚀 Earnings per share (EPS) increased significantly to Rs 11.49 from Rs 2.81 YoY.
• 4. ⬆️ Gross profit ratio increased to 9.78% from 8.47% YoY.
• 5. 🏭 Annual production decreased from 59.503 Sq. Meters in Million (2024) to 59.625 Sq. Meters in Million (2025).
• 6. 💰 Dividend per share increased to Rs 5.50.
• 7. ☀️ Company installed a 1 MW solar plant and is adding 3.3 MW more.
• 8. 🏢 Administrative expenses increased due to inflationary pressures.
• 9. ⬇️ Finance costs decreased due to prudent financial management.
• 10. 📊 Breakup Value per Share is Rs 245.33.
• 11. 🧑‍💼 Governing board has 10 members.
• 12. 📉 Director’s holdings is 38.03% of the company shares.
• 13. ⚠️ The textile industry faces challenges from rising energy costs and climate change.
• 14. 🎯 Company focuses on cost-effective energy solutions and efficient inventory procurement.
• 15. 🤝 Credit rating maintained at ‘A-/A-2′ by VIS Credit Rating Company Limited.

🎯 Investment Thesis

HOLD. The company has shown improved profitability despite a decrease in revenue, which is encouraging. However, the sustainability of this profitability and the ability to regain revenue growth are uncertain. The improved EPS is offset by decreased Sales growth. A wait-and-see approach is warranted until the company demonstrates consistent revenue growth and sustained profitability. Until then, the company does not warrant a buy or sell.