⚡ Flash Summary

Dewan Salman Fibre Limited reported a net loss after taxation of Rs. 51.209 million for the quarter ended September 30, 2025, compared to a gain of Rs. 242.924 million in the same period last year. The company’s operations have been closed since December 2008 due to working capital constraints. Management is focused on negotiating debt restructuring with lenders and remains confident in achieving favorable outcomes. The textile sector faces challenges including declining export orders and rising costs, impacting PSF demand.

📌 Key Takeaways

• 📉 Net loss after taxation of Rs. 51.209 million for Q1 2025, a significant decline from a gain of Rs. 242.924 million in Q1 2024.
• 🏭 Operations remain closed since December 2008 due to working capital constraints.
• 💰 Accumulated losses have reached Rs. 23.630 billion as of September 30, 2025.
• 🚧 Negative equity of Rs. 17.925 billion, highlighting severe financial distress.
• 💼 Management is actively negotiating debt restructuring with lenders.
• 🤝 Confident in securing favorable outcomes from debt restructuring.
• 📉 Textile sector faces challenges, including declining export orders and rising costs.
• ⬇️ Reduced PSF demand in Q1 2025 due to textile sector struggles.
• ⚔️ Ongoing litigation with lenders for repayment of liabilities.
• 🚫 No sales recorded during the period under review (Rs. Nil).
• ⚠️ Current liabilities exceed current assets by Rs. 20.958 billion.
• 🏭 Underutilized supply capacity due to low demand in the domestic PSF market.

🎯 Investment Thesis

Given the severe financial distress, negative equity, and ongoing operational shutdown, a SELL recommendation is warranted. The company faces significant risks, and the potential for recovery is highly uncertain. Investors should avoid this stock due to the high risk of further losses.