⚡ Flash Summary

Shadab Textile Mills Limited announced its unaudited financial results for the first quarter ended September 30, 2025. The company reported a significant turnaround in profitability, with a profit after tax of Rs. 88.805 million compared to Rs. 35.377 million in the same period last year. Total net sales increased by 12.65% to Rs. 2,154.417 million. The company’s earnings per share (EPS) also improved substantially, reaching Rs. 5.35 compared to Rs. 2.13 in the prior year’s quarter. This improved performance was driven by various factors, including a stable exchange rate and effective management of short-term borrowings.

📌 Key Takeaways

• ✅ Profit after tax surged to Rs. 88.805 million, a significant increase from Rs. 35.377 million last year.
• 📈 Net sales grew by 12.65%, reaching Rs. 2,154.417 million compared to Rs. 1,912.508 million.
• 💰 Earnings per share (EPS) jumped to Rs. 5.35 from Rs. 2.13 in the same period last year.
• 💹 Positive performance attributed to stable exchange rates and effective management of short-term borrowings.
• ⚡ Company completed a 2.875 MW solar system to mitigate energy cost pressures and reduce production costs.
• 🏭 Plans to enhance solar capacity and undertake BMR of existing facilities at Unit 1 to improve operational efficiency.
• 🌱 Expansion at Unit 2 planned to increase production capacity and market share.
• ⚠️ Recent floods in Pakistan may adversely affect the cotton crop and the spinning sector.
• 🤝 Company hopes for government support through reduced utility tariffs and financing for renewable energy initiatives.
• 🏦 Counter guarantees of Rs. 99.996 million issued to Sui Northern Gas Pipelines Limited and Lahore Electric Supply Company.
• 🏗️ Non-capital expenditure commitments amount to Rs. 287.293 million.
• 👨‍💼 Remuneration/meeting fee paid to major shareholders and directors amounts to Rs. 1.725 million.
• 🤝 Sponsor loan balance is Rs. 390.673 million.
• 💵 Salaries and benefits for key management personnel (other than directors) are Rs. 9.717 million.

🎯 Investment Thesis

Shadab Textile Mills is a BUY due to its significant turnaround in profitability, strong sales growth, and improved EPS. The company’s proactive measures to mitigate energy costs through solar investments and planned BMR activities should further enhance operational efficiency. However, keep an eye on cotton crop and regulatory changes. Price Target: Rs. 75. Time Horizon: Medium Term