⚡ Flash Summary
Shadman Cotton Mills reported a net profit of PKR 9.48 million for the quarter ended September 30, 2025, a significant turnaround from the loss of PKR 27.28 million in the same quarter last year. This improvement is despite a decrease in revenue from PKR 127.30 million to PKR 75.36 million. The company appears to have managed costs effectively, as the cost of sales also decreased substantially. Basic and diluted profit per share stood at PKR 0.54, compared to a loss per share of PKR 1.55 in the prior year.
📌 Key Takeaways
- ✅ Net profit turns positive: PKR 9.48 million profit vs. PKR 27.28 million loss YoY.
- 📉 Revenue declined: PKR 75.36 million vs. PKR 127.30 million YoY, a 40.8% decrease.
- 💰 EPS improved: PKR 0.54 vs. negative PKR 1.55 YoY.
- ✂️ Cost of sales reduced: PKR 89.23 million vs. PKR 146.63 million YoY.
- 📊 Gross profit/loss improved: From a loss of PKR 19.33 million to a loss of PKR 13.87 million YoY.
- 📉 Selling and distribution expenses decreased: PKR 0.55 million vs PKR 5.31 million YoY.
- 📉 Administrative expenses decreased: PKR 8.24 million vs. PKR 17.01 million YoY.
- 📈 Operating profit/loss improved: From a loss of PKR 24.55 million to a profit of PKR 13.99 million YoY.
- 💸 Finance costs increased: PKR 1.38 million vs. PKR 0.39 million YoY.
- ⚖️ Total Equity increased: PKR 858.95 million vs PKR 790.74 million YoY.
- ✔️ Cash and Bank Balance decreased: PKR 8.53 million vs PKR 27.37 million from June 30, 2025.
- ✔️ Short term borrowings decreased: PKR 109.53 million vs PKR 154.86 million from June 30, 2025.
🎯 Investment Thesis
BUY. Shadman Cotton Mills has demonstrated a strong turnaround in profitability, driven by effective cost management. While revenue decreased, the positive EPS and improved operating profit make this stock attractive. Price target: PKR 25.00 (based on a P/E of 45 and EPS of 0.54) Time horizon: Medium Term (12-18 months).
Disclaimer: AI-generated analysis. Not financial advice.