📉 KSTM: SELL Signal (8/10) – Corporate Briefing Session-2025

📌 Key Takeaways

• 📉 KSTM’s loss before taxation widened to -24.59 million in 2025.
• 📉 Net loss after taxation increased to -19.32 million in 2025.
• 🚫 No revenue was generated in 2025, same as 2024.
• ⚠️ Other operating income decreased by -20.41 million (-34%) in 2025.
• 🏢 Administrative expenses decreased slightly by 0.13 million (-17%).
• ⚙️ Other operating expenses decreased by -2.33 million (-12%).
• 💰 Finance costs increased by 0.04 million (92%).
• 🇵🇰 Devaluation of the Pakistani Rupee cited as a major challenge.
• ⚡ Energy crisis remains a concern for the company.
• 🌍 Stiff competition and reduced textile imports by the US & EU pose additional challenges.
• ✅ Management aims to improve operational performance through cost-effective niche marketing.
• 🤝 Hopes for positive impact from changes in government policies and facilitation of the textile sector.
• 📊 Number of outstanding shares remained constant at 107,000 shares.
• 📉 Negative owner’s equity worsened from -57.922 million to -77.244 million
• 📉 Earning per share also decreased from -1.28 to -1.81

🎯 Investment Thesis

Given the deteriorating financial performance, absence of revenue, and various operational and market risks, a SELL recommendation is warranted. The company’s negative owner’s equity and widening losses make it an unattractive investment. The lack of a clear turnaround strategy and dependence on external factors further reinforce the negative outlook. While the management expresses optimism, the current financial situation indicates a high probability of continued losses and challenges. The price target is set significantly below current levels, reflecting the distressed nature of the company.