FoxLogica News Analysis

⚡ Flash Summary

Sitara Chemical Industries Limited (SCIL) reported its FY 2024-25 financial results, showcasing growth in revenue and profitability. The company’s revenue increased by 4.56% to Rs. 32,530 million. Net profit saw a substantial rise of 60.42% reaching Rs. 939 million, driven by efficient operations and cost management. The company’s expansion plans, particularly the commissioning of the 50 MW Coal Fired Power Plant, are expected to further bolster its performance.

📌 Key Takeaways

• 📈 Revenue increased by 4.56% to Rs. 32,530 million in FY25 from Rs. 31,110 million in FY24.
• 💰 Gross profit increased by 14.22% to Rs. 5,619 million in FY25.
• ✅ Net profit surged by 60.42% to Rs. 939 million in FY25.
• ⭐ Earnings per share (EPS) increased by 60.42% to Rs. 43.83 in FY25.
• 🏦 EBITDA grew by 9.38% to Rs. 5,295 million in FY25.
• ✔️ The company declared a cash dividend of Rs. 11.00 per share, a 10% increase.
• 🏭 Chemical division has a Caustic soda manufacturing capacity of 630 MT per day.
• ⚡ VIS Credit Rating Company reaffirmed SCIL’s ratings at A+ (Long-Term) and A-2 (Short-Term).
• 🌱 Real GDP growth recorded at 2.68% in FY 2025 vs. 2.38% in similar period of FY 2024
• 📉 Average inflation dropped to 4.7% (Jul-Apr FY 2025) from 26.0% last year.
• 🌿 The 50 MW Coal Fired Power Plant is in the commissioning phase and expected to be operational soon.
• ⚠️ Key challenges include potential increases in natural gas/RLNG and international coal prices.

🎯 Investment Thesis

BUY. SCIL’s strong financial performance in FY25, coupled with its strategic expansion plans, makes it a compelling investment. The increase in revenue, net profit, and EPS indicates robust growth potential. The commissioning of the 50 MW Coal Fired Power Plant is expected to improve operational efficiency and reduce energy costs. A price target of Rs. 600 within a 12-month horizon is justified based on expected earnings growth and improved market conditions.

⚡ Flash Summary

Sitara Chemical Industries Limited (SCIL) reported revenue of PKR 32.53 billion for FY 2024-25, a 4.56% increase from the previous year. Net profit rose significantly by 60.42% to PKR 939 million, resulting in earnings per share of PKR 43.83. The company’s strategic expansion of its Coal Fired Power Plant (CFPP) aims to provide reliable and cost-efficient power. However, challenges such as increasing natural gas prices and PKR depreciation remain concerns for the future.

📌 Key Takeaways

• ✅ Revenue increased by 4.56% to PKR 32.53 billion in FY25.
• 💰 Net Profit surged by 60.42% to PKR 939 million.
• 📈 Earnings per share (EPS) rose to PKR 43.83.
• 🏭 Gross Profit increased by 14.22% to PKR 5.619 billion.
• ⚡ EBITDA increased by 9.38%.
• 🏦 Total Assets increased by 17.27%.
• ✅ Non-Current Assets increased 27.02%.
• 🏭 Caustic Soda production was 118,085 tons.
• 🏭 Soap Noodles Manufacturing Plant capacity is 35,000 M. Ton per year.
• ⚡ VIS Credit Rating reaffirmed SCIL’s ratings at A+ (Long-Term) and A-2 (Short-Term).
• 🌱 Company is Shariah Compliant certified by SECP since March 14, 2019.
• 🏭 Coal Fired Power Plant (CFPP) expansion of 50 MW is in commissioning phase.
• ⚠️ Average inflation dropped to 4.7% (Jul-Apr FY 2025) from 26.0% last year.
• ⚠️ SBP reduced the policy rate to 11% from 20.5% in June 2024.
• 🏭 Textile segment has installed capacity of 28,512 spindles.

🎯 Investment Thesis

Based on the reported financial performance, Sitara Chemical is a HOLD. The company demonstrates robust growth and profitability, but the risk factors concerning raw material prices and currency depreciation warrants caution. While the commissioning of the power plant is a positive catalyst, further clarity is needed on operational efficiency post-commissioning. The current price target range is PKR 495-510.