⚡ Flash Summary
Zahidjee Textile Mills Limited’s corporate briefing for the year ended June 30, 2025, presents a mixed picture. While the company has made strides in strategic positioning and capital expenditure, financial performance shows a decline in sales and profitability compared to previous years. The company is focused on export-led growth, value addition, and sustainability. A significant capital expenditure was undertaken in the spinning segment, indicating investments in infrastructure. The company needs to address declining sales and profit.
📌 Key Takeaways
- 📉 Sales decreased from PKR 37.74 billion in 2024 to PKR 40.61 billion in 2025.
- 📉 Gross profit declined significantly from PKR 1.83 billion in 2024 to PKR 2.67 billion in 2025.
- 📉 Operating profit increased from PKR 2.93 billion in 2024 to PKR 3.46 billion in 2025.
- 📉 Profit before taxation increased from PKR 830 million in 2024 to PKR 1.68 billion in 2025.
- 🏭 Successfully implemented a new spinning project comprising 16,800 spindles.
- ⬆️ Property, plant, and equipment increased by PKR 3.53 billion YoY.
- ✔️ Vertically integrated textile exporter with robust manufacturing capabilities.
- ✔️ Focus on high-margin export markets, especially in Europe and USA.
- ✔️ Emphasis on dyed, finished, and stitched products to move up the value chain.
- ✔️ Leveraging eco-certifications and ESG compliance to meet global buyer standards.
- ✔️ Total additions to fixed assets totaled PKR 287.87 million in FY-2025.
- ✔️ New spindles are contributing to yarn production.
- ➡️ Fixed asset turnover ratio decreased from 2.41 to 2.12
- ➡️ Debt to capital ratio decreased from 83 to 77
- ⬆️Book value per share increased to 74.66 from 65.41
🎯 Investment Thesis
Given the decrease in sales and profit, I recommend a HOLD rating for Zahidjee Textile Mills Limited. While the company has made investments in its spinning capacity, it needs to address declining sales and profit. A potential price target cannot be accurately determined without a detailed financial model, but it would be prudent to wait for sales and profitability to improve before considering a BUY rating.
Disclaimer: AI-generated analysis. Not financial advice.