📉 FIMM: SELL Signal (7/10) – Transmission of Quarterly Report for 1st Quarter Ended September 30, 2025

📌 Key Takeaways

• 📉 Net loss of Rs. 2.18 million compared to a profit of Rs. 29.16 million YoY.
• 📉 Sales decreased from Rs. 308.11 million to Rs. 252.40 million YoY.
• 📉 Gross profit declined from Rs. 74.68 million to Rs. 50.11 million YoY.
• 🇨🇳 Trade war between China and USA impacting sales due to inventory buildup.
• 📉 Loss per certificate (basic & diluted) is Rs. (0.73) compared to earnings of Rs. 9.72 last year.
• ⚠️ Modaraba has a substantial stock of products needing to be sold at a discount.
• ⬆️ Operating expenses increased from Rs. 26.19 million to Rs. 33.0 million YoY.
• ⬇️ Other income decreased from Rs. 0.94 million to Rs. 0.13 million YoY.
• 🏢 Management focusing on cost control and increasing sales.
• 🏦 Multiple banking facilities utilized, including Diminishing Musharaka and Musawamah.
• ⚖️ Contingency related to Sindh Workers Welfare Fund (SWWF) under appeal.
• 🧾 Post-dated cheques issued to Collector of Customs amount to Rs. 74.920 million.
• 🤝 Related party transactions include expenses and rent with Group Companies.
• 🗓️ Financial information approved for issue on October 28, 2025.

🎯 Investment Thesis

Recommendation: SELL. Rationale: The significant decline in financial performance, including a net loss, decreased sales and gross profit, and challenges in managing inventory, makes First Imrooz Modaraba unattractive for investment. The ongoing trade war and its impact on sales necessitate a conservative approach. Price Target: Rs. 8/- Time Horizon: Short-term (6 months) due to potential for future improvement if management’s cost-control and sales-increase efforts are successful.