⚡ Flash Summary

Leather Up Limited reported a challenging financial year ending June 30, 2025. The company experienced a significant decrease in sales revenue, leading to a substantial net loss. The statement of financial position shows a decrease in total assets and total equity and liabilities. The negative profit per share raises concerns about the company’s profitability.

📌 Key Takeaways

• 📉 Sales revenue decreased by 56.1% from Rs 27,525,256 in 2024 to Rs 12,086,203 in 2025.
• 💔 Gross profit turned into a gross loss of Rs 1,199,957 in 2025 compared to a profit of Rs 6,276,599 in 2024.
• 😟 Operating loss significantly increased to Rs 4,987,519 in 2025 from Rs 90,821 in 2024.
• ⛔ Loss before taxation was Rs 4,508,641 in 2025, compared to a profit of Rs 321,682 in 2024.
• ❌ Loss after taxation was Rs 4,508,641 in 2025, a sharp decline from a profit of Rs 321,682 in 2024.
• 📉 Loss per share was Rs 0.75 in 2025, compared to earnings per share of Rs 0.05 in 2024.
• 📉 Total assets decreased from Rs 28,465,209 in 2024 to Rs 21,930,590 in 2025.
• 📉 Stock-in-trade decreased significantly from Rs 17,840,117 in 2024 to Rs 10,342,437 in 2025.
• ⬆️ Actuarial gain on defined benefit increased slightly to Rs 123,662 in 2025 from Rs 144,599 in 2024.
• ⬇️ Accumulated losses increased from Rs 44,468,647 in 2024 to Rs 48,977,289 in 2025.
• ⬇️ Total equity and liabilities decreased from Rs 28,465,209 in 2024 to Rs 21,930,590 in 2025.
• 💸 Net cash used in operating activities was Rs 561,350 in 2025, compared to cash generated of Rs 1,427,613 in 2024.
• Loan from directors decreased from Rs 88,600 to Rs 33,600.
• Trade and other payables decreased from Rs 6,022,104 to Rs 3,704,737.

🎯 Investment Thesis

Based on the analysis, a SELL recommendation is appropriate for Leather Up Limited. The company’s poor financial performance, negative profitability, and declining assets raise significant concerns about its ability to generate returns for investors. A price target of Rs 2.00 is set, based on the current distressed financial state and potential for further decline. This recommendation has a short-term time horizon of 6 months, reflecting the urgency of addressing the company’s financial issues.