⚡ Flash Summary

Elahi Cotton Mills Limited reports a challenging first quarter for 2025, with a turnover of Rs. 253.126 million, a decrease of 5.20% compared to Rs. 266.300 million in the same period last year. The company experienced a loss after tax of Rs. 3.564 million, a significant downturn from a profit of Rs. 10.050 million in 2024. This loss is attributed to decreased rates of finished goods, and management anticipates unfavorable conditions in the next quarter due to reduced demand. The loss per share stands at Rs. 2.74, and the directors do not recommend any dividend or bonus shares.

📌 Key Takeaways

• 📉 Revenue decreased by 5.20%, from Rs. 266.300 million to Rs. 253.126 million.
• ⬆️ Cost of sales increased slightly by 0.70%, from Rs. 247.018 million to Rs. 248.750 million.
• ⚠️ The company incurred a loss before taxation of Rs. 0.400 million, compared to a profit of Rs. 14.521 million in the same quarter last year.
• 💸 Loss after tax amounted to Rs. 3.564 million, a stark contrast to the profit of Rs. 10.050 million in the previous year.
• 📉 Loss per share is Rs. 2.74, a significant drop from an EPS of Rs. 7.73 last year.
• 🚫 No cash dividend or bonus shares are recommended by the directors.
• 🏭 The company’s primary business is manufacturing and selling pure polyester yarn.
• 📉 Management expects continued unfavorable conditions due to reduced demand from the value-added textile industry.
• 📊 Total Assets increased from Rs. 276,533,287 to Rs. 288,791,417.
• 📉 Accumulated loss increased from (Rs. 58,732,763) to (Rs. 61,688,907).
• 💰 Cash and cash balances decreased slightly from Rs. 10,159,419 to Rs. 9,949,003.
• 📉 Operating (Loss)/profit shows a significant decrease, from profit of Rs. 14,506,555 to a loss of (Rs. 385,959).
• 🚫 Company authorized for issue on 28.10.2025 by the Board of Directors.
• 💼 Staff retirement benefits (gratuity) increased from Rs. 38,635,595 to Rs. 41,351,105.

🎯 Investment Thesis

Based on the current financial performance, a SELL recommendation is warranted. The significant decrease in revenue and transition to a loss position, along with unfavorable expectations for the next quarter, indicate substantial challenges. Until a clear turnaround strategy is implemented and shows tangible results, investing in Elahi Cotton Mills Limited carries high risk. A realistic price target cannot be provided until profitability is restored, and the time horizon for potential recovery is uncertain.