⚡ Flash Summary

Zephyr Textiles Limited (ZTL) reported a slight decrease in net sales, with PKR 8.28 billion compared to PKR 8.39 billion in 2024, a 1.36% decrease. Gross profit declined by 9.09% to PKR 815.17 million, impacted by elevated input costs. EBITDA also decreased by 11.83% to PKR 570.85 million due to increased operational expenses and cost pressures. Consequently, the company’s after-tax profit significantly dropped by 96.02%, leading to a substantial decline in Earnings Per Share (EPS) from PKR 0.77 to PKR 0.03.

📌 Key Takeaways

• 📉 Revenue declined slightly by 1.36%, from PKR 8.39 billion to PKR 8.28 billion.
• ⚠️ Gross profit decreased by 9.09%, from PKR 896.67 million to PKR 815.17 million.
• 💸 EBITDA dropped by 11.83%, from PKR 647.46 million to PKR 570.85 million.
• ⬆️ Depreciation charges increased by 12.91%, from PKR 203.02 million to PKR 229.23 million.
• ⬇️ Finance costs decreased by 10.82%, from PKR 293.00 million to PKR 261.30 million.
• 📉 Profit before tax decreased significantly by 46.96%, from PKR 151.44 million to PKR 80.32 million.
• 📉 Net profit after tax plummeted by 96.02%, from PKR 45.65 million to PKR 1.82 million.
• 📉 Earnings Per Share (EPS) declined drastically from PKR 0.77 to PKR 0.03.
• 😬 The company experienced a loss of PKR 12.644 million on the sale of looms, compared to a gain of PKR 97.48 million previously.
• 🚧 Current ratio remained relatively stable at 0.97, slightly below 1.
• 🌱 Management is focused on long-term strategic objectives and cost optimization.
• Optimistic outlook for 2026 with focus on revenue growth and cost efficiency.

🎯 Investment Thesis

Given the significant decline in profitability and challenging market conditions, a SELL recommendation is warranted. The company needs to demonstrate a turnaround in its operational efficiency and revenue growth. Price target to be re-evaluated once there is evidence of improved financial performance.