⚡ Flash Summary

Ghazi Fabrics International Limited (GFIL) reported its FY2025 results, revealing a significant downturn primarily attributed to plant shutdowns and minimal operations. Sales plummeted by 86.6% year-over-year, resulting in a notable operating loss. The company’s profitability ratios have deteriorated sharply, with gross profit, operating profit, and net profit margins all experiencing substantial negative shifts. While the company shows improved liquidity ratios, the overall financial health is concerning due to massive reduction in operations.

📌 Key Takeaways

• 📉 **Revenue Decline:** Sales decreased by 86.6% from Rs 4,422.589 million in 2024 to Rs 594.031 million in 2025 due to plant shutdowns.
• 💔 **Gross Loss:** The company recorded a gross loss of Rs (289.056) million in 2025, compared to Rs (408.877) million in 2024.
• ⚠️ **Operating Loss:** Operating loss stood at Rs (370.457) million in 2025.
• 😭 **Loss After Tax:** Loss after tax was Rs (376.845) million in 2025, compared to Rs (687.002) million in 2024.
• 📉 **EPS Decline:** Loss per share (EPS) worsened to Rs (11.55) in 2025 from Rs (20.42) in 2024.
• 📉 **Gross Profit Margin:** The Gross Profit/(Loss)% decreased from (9.25)% in 2024 to (48.66)% in 2025.
• 📉 **Operating Profit Margin:** Operating Profit/(Loss)% declined from (13.23)% in 2024 to (62.36)% in 2025.
• 📉 **Net Profit Margin:** Net Profit/(Loss)% fell from (15.07)% in 2024 to (63.44)% in 2025.
• 🔄 **Inventory Turnover:** Inventory TO Ratio decreased from 11.12 times in 2024 to 7.47 times in 2025.
• ⬇️ **Current Assets:** Current assets decreased by 40.9% from Rs 786.287 million in 2024 to Rs 464.848 million in 2025.
• ⬇️ **Current Liabilities:** Current liabilities decreased significantly by 90.0% from Rs 490.470 million in 2024 to Rs 49.079 million in 2025.
• ⬆️ **Current Ratio:** Current ratio increased from 1.60 in 2024 to 9.47 in 2025.
• 🏭 **Fixed Assets:** Fixed assets decreased slightly by 2.6% from Rs 4,060.580 million in 2024 to Rs 3,956.253 million in 2025.
• 🔥 **Key Risk:** Textile sector faces major challenges including high exchange rates, increased power outages and high energy prices.

🎯 Investment Thesis

Based on the FY2025 results, a **SELL** recommendation is warranted for Ghazi Fabrics International Limited. The drastic decline in sales and profitability, coupled with significant operational and financial risks, indicates a challenging outlook. The improved liquidity isn’t sufficient to compensate for the deteriorating core business performance. A price target cannot be reliably established due to operational issues, but selling the stock seems appropriate until stability returns. Time horizon is until major operational restructuring shows sustainable results, likely **LONG_TERM**.