⚡ Flash Summary
Service Industries Textiles Limited reported a net loss of Rs. 9.829 million for the quarter ended September 30, 2025, a significant increase from the Rs. 1.672 million loss in the same period last year. Revenue decreased to Rs. 335.153 million from Rs. 371.757 million. The company cites high energy costs due to the withdrawal of regionally competitive energy tariffs and challenges in cotton production as contributing factors to the loss. Efforts to mitigate high energy costs include solar energy investments, with plans for further expansion.
📌 Key Takeaways
- ❌ Net loss significantly increased to Rs. 9.829 million, compared to Rs. 1.672 million last year.
- 📉 Revenue declined from Rs. 371.757 million to Rs. 335.153 million.
- ⚡️ High energy costs due to tariff withdrawals impacted profitability.
- ☀️ Solar energy investments are underway to offset energy costs.
- 🌱 Challenges in cotton production continue to affect the spinning sector.
- ⚠️ Accumulated loss increased to Rs. 387.166 million.
- 📉 Loss per share increased to (0.71) from (0.12).
- 🏦 Short term borrowings decreased to Rs 20.043 million from Rs 21.543 million.
- 🏭 Cost of sales decreased slightly to Rs. 325.491 million from Rs. 355.802 million.
- 🤝 Company plans to continue efforts to mitigate adverse impacts and remains hopeful for improving macro and microeconomic conditions.
🎯 Investment Thesis
Based on the reported quarterly results, a SELL recommendation is warranted. The company’s increased losses, declining revenue, and operational challenges make it a risky investment. While solar energy investments are a positive step, they are unlikely to offset the immediate financial strain. Price movement downwards to PKR 10 with a time horizon of 6 months
Disclaimer: AI-generated analysis. Not financial advice.