⚡ Flash Summary

Shahzad Textile Mills Limited (SZTM) reported a significant turnaround in its financial performance for the quarter ended September 30, 2025. The company achieved a pre-tax profit of Rs. 117.069 million, a stark contrast to the Rs. 5.265 million loss reported in the same period last year. Net sales also saw a substantial increase, reaching Rs. 3,354.647 million compared to Rs. 2,227.070 million in the corresponding quarter of the previous year. This positive shift is attributed to effective management strategies and a focus on operational efficiency.

📌 Key Takeaways

• 💰 Pre-tax profit soared to Rs. 117.069 million, reversing a Rs. 5.265 million loss YoY.
• 📈 Net sales jumped to Rs. 3,354.647 million from Rs. 2,227.070 million YoY.
• 🌞 Planned investment in a 2 MW solar energy system for enhanced efficiency.
• ⏳ Expected payback period for the solar investment is approximately 1.75 years.
• 🧑‍🎓 Focus on developing human capital through targeted training programs.
• 🤝 Strategic relationships reinforced with key stakeholders for market expansion.
• ⭐ Earnings per share (EPS) stood at Rs. 3.67, compared to a loss of Rs. 1.60 per share YoY.
• 🏭 ISO 9001:2015 certification underscores commitment to quality standards.
• 💼 Intention to arrange financing from financial institutions for strategic initiatives.
• 🌳 Strong focus on long-term sustainable growth and operational efficiency.
• ⚡ Management is proactively assessing strategic options to combat rising input costs and energy prices.
• 🌱 Company continues to reinforce strategic relationships with key stakeholders to expand market footprint and promote innovation.

🎯 Investment Thesis

BUY. SZTM has demonstrated a remarkable turnaround in its financial performance, driven by increased sales and improved operational efficiency. The planned investment in a solar energy system should lead to sustained profitability. The company’s focus on human capital development and strategic relationships enhances its long-term growth potential. The price target is Rs. 55, based on an expected P/E of 15x FY26 EPS of Rs. 3.67, implying roughly 30% upside. The time horizon is medium term.