⚡ Flash Summary
Shahtaj Textile Limited’s corporate briefing session presentation reveals a challenging year ended June 30, 2025. Net sales decreased by 16.8% to Rs 6.620 billion due to a shift in sales strategy towards orders where yarn is customer-supplied. Despite lower revenues, the company achieved a profit after tax of Rs 110.983 million, significantly higher than the previous year, resulting in an EPS of Rs 11.49, up from Rs 2.81. This enhanced profitability is attributed to reduced finance costs, minimum tax benefits, and an improved gross profit margin, which rose to 9.78% from 8.47%.
📌 Key Takeaways
- 📉 Revenue decreased by 16.8%, from Rs 7.953 billion to Rs 6.620 billion.
- ✅ Profit after tax increased to Rs 110.983 million compared to Rs 27.192 million last year.
- 🚀 Earnings per share (EPS) increased to Rs 11.49 from Rs 2.81.
- 📈 Gross profit margin improved to 9.78% from 8.47%.
- 💰 Cash dividend declared at Rs 5.50 per share.
- ⚡️ The company installed a 1 MW solar plant and is adding 3.3 MW more to reduce energy costs and carbon footprint.
- 🏭 Total installed looms are 179, supported by self-power generation.
- ✔️ Credit rating maintained at ‘A-/A-2’ by VIS Credit Rating Company Limited.
- 🏢 Authorized capital is Rs 100,000,000 with an issued paid-up capital of Rs 96,600,000.
- 🌍 Operations span from manufacturing in Lahore to marketing in Karachi.
- 📊 Breakup Value per Share is 245.33
- ✔️ The company’s focus is on manufacturing grey fabric for key exporters.
- 🤝 The company is a part of the Shahnawaz Group.
- 🗓️ The company was incorporated in January 1990.
🎯 Investment Thesis
HOLD. Shahtaj Textile’s improved profitability and EPS are encouraging, but the significant revenue decrease warrants caution. The strategic shift in sales needs to be monitored for sustained impact. The company’s cost management efforts and investment in renewable energy are positive signals. The current valuation appears attractive, but a more in-depth analysis is needed before considering a BUY rating. Continue to monitor the company’s financial performance over the next few quarters to assess the sustainability of these improvements.
Disclaimer: AI-generated analysis. Not financial advice.