⚡ Flash Summary

Sunrays Textile Mills Limited reported a decrease in revenue from PKR 20.15 billion in 2024 to PKR 19.26 billion in 2025. The company’s profit after tax also decreased significantly from PKR 177.19 million to PKR 76.62 million, resulting in a drop in earnings per share from PKR 8.56 to PKR 3.70. Despite the challenges, the company’s credit rating has improved, reflecting stronger economic conditions and reduced pressure on various financial costs. Management aims to rationalize costs, optimize capacity utilization, and integrate renewable energy to maximize profitability.

📌 Key Takeaways

• 📉 Revenue decreased from PKR 20.15 billion in 2024 to PKR 19.26 billion in 2025.
• 📉 Gross Profit decreased from PKR 1.60 billion in 2024 to PKR 1.50 billion in 2025.
• 📉 Profit after Tax decreased significantly from PKR 177.19 million to PKR 76.62 million.
• 📉 Earnings Per Share (EPS) decreased from PKR 8.56 to PKR 3.70.
• ✅ Current Ratio decreased from 1.88 to 1.50.
• 👍 Improved credit rating from ‘CCC+’ to ‘B-‘ reflecting stronger economic conditions.
• 🏭 Reduction in U.S. tariffs from 29% to 19% positively impacts Pakistan’s textile sector.
• ⚠️ Political instability and policy challenges pose risks to sustainable growth.
• 🔥 Escalating gas prices for captive power plants may adversely impact overall power costs.
• 🎯 The company aims to rationalize costs and maximize capacity utilization.
• 🌱 Renewable energy integration is planned to maximize profitability.
• ✔️ Reduction in cotton prices and stable exchange rates are expected to reduce production costs.
• 🗓️ The company was incorporated in Pakistan on August 27, 1987.
• 🧶 Core business is yarn spinning, including various types of ring-spun and open-end yarns.
• A- rating by VIS Credit Rating Company Limited

🎯 Investment Thesis

Based on the financial performance, I recommend a SELL rating for Sunrays Textile Mills Limited. The company’s declining revenue, profits, and EPS indicate financial distress. While the improved credit rating and potential benefits from tariff reductions are positive, they are not sufficient to offset the significant challenges. The Price target is PKR 70 with a 6 month time horizon, as the current share price is significantly overvalued. The company needs to demonstrate sustainable profitability and revenue growth before a positive investment recommendation can be considered.