📉 RUPL: SELL Signal (8/10) – Financial Results for the 1st Quarter Ended 2025-09-30

📌 Key Takeaways

• ⚠️ Rupali Polyester Limited (RUPL) reported a loss of PKR (289.294) million for the quarter ended September 30, 2025.
• 📉 Sales plummeted to PKR 967.453 million from PKR 2,443.363 million year-over-year.
• 🔥 Cost of sales remained high at PKR 1,150.688 million, exceeding total sales.
• Gross profit turned into a loss of PKR (183.235) million, compared to a loss of PKR (58.164) million last year.
• 💸 Finance costs decreased from PKR 143.944 million to PKR 82.876 million, but remained a significant expense.
• 🚫 No cash dividend, bonus shares, or right shares were declared.
• EPS (basic and diluted) was negative PKR (8.49) compared to negative PKR (7.70) in the corresponding period.
• 🔻 Loss before taxation increased to PKR (277.200) million from PKR (231.702) million.
• 📉 Cash flow from operating activities was negative PKR (29.336) million.
• Investments in property, plant, and equipment saw a slight decrease to PKR (18.452) million.
• Borrowings decreased in value from PKR 2,485,875 to PKR 2,937,679
• Tax refunds from the government also remained steady at around PKR 169 million.
• The company’s short-term borrowings have risen to PKR 2,937,679,000 (thousands), from PKR 2,485,875,000

🎯 Investment Thesis

Based on the current financial performance and associated risks, a SELL recommendation is warranted for RUPL. The significant decline in revenue, coupled with continued losses, indicates fundamental issues with the company’s operations and financial management. The negative cash flow and increasing short term borrowings raise concerns about the company’s ability to sustain its operations in the long term. Given the lack of positive catalysts and the prevailing negative trends, a price target significantly below the current market price is justified. A time horizon of SHORT_TERM is appropriate, as the company’s financial challenges are likely to persist and could potentially worsen in the near term.