⚡ Flash Summary

Bela Automotives Limited’s annual report for the year ended June 30, 2025, reveals continued financial struggles. The company reports a gross loss and a net loss before tax. Despite settling a dispute with Habib Bank Limited and intentions to acquire new working capital, the auditor expresses an adverse opinion on the financial statements due to going concern issues and non-compliance with accounting standards. The company’s management aims to wipe out accumulated losses by June 2028, but significant challenges remain.

📌 Key Takeaways

• ❌ Bela Automotives reported a gross loss of PKR (4,682,063) for the year ended June 30, 2025.
• 📉 The company’s loss before tax was PKR (24,514,639).
• ⚠️ Accumulated losses carried forward to the balance sheet amounted to PKR (24,514,639).
• 📉 Earning per share (EPS) was negative at (4.23).
• ⚖️ A long-standing dispute with Habib Bank Limited (HBL) has been settled.
• 💼 The company intends to acquire 2,900,000 ordinary shares, representing 50.02% of total shares.
• 🏭 The plant has not been fully utilized due to lack of adequate working capital.
• 🎯 The company projects to wipe out accumulated losses by June 2028.
• 📜 Auditors have expressed a qualification regarding the company’s going concern assumption.
• 🚫 The company has not carried out an assessment of impairment for capital work in progress.
• 🏦 A loan was obtained from Universal Auto Engineering to repay an earlier loan from HBL.
• ✔️ The board has formed an audit committee and an HR & Remuneration Committee.
• 🔒 Share transfer books will remain closed from October 22, 2025, to October 28, 2025.
• 📊 Total number of employees as of June 30 includes 1 permanent and 3 contractual employees.
• 🤝 The board is responsible for setting the Company’s sustainability strategies.

🎯 Investment Thesis

Given the company’s continuous financial losses, the auditor’s adverse opinion, and ongoing concerns about its ability to operate as a going concern, a SELL recommendation is justified. There is no reasonable evidence to suggest a turnaround in the near term. The company faces substantial financial and operational hurdles, making investment highly speculative.