β‘ Flash Summary
Janana De Malucho Textile Mills Limited (JDMT) reported significantly decreased sales for the year ended June 30, 2025, with a turnover decrease of Rs. 4,361 million compared to the previous year, leading to a net loss after taxes of Rs. 754.804 million. The company attributes this decline to lower yarn availability due to temporary production suspensions and reduced demand because of cheaper imported yarn. They are facing gross and operational losses of Rs.485.835 million and Rs.512.974 million respectively. Despite the current losses, JDMT is focusing on future improvements by installing a megawatt solar plant, optimizing yarn production based on market factors, and adopting lean production practices.
π Key Takeaways
- π Turnover decreased by Rs. 4,361 million compared to last year.
- π Temporary suspension of production contributed to lower sales volume.
- π Cheaper imported yarn impacted demand for local products.
- β Gross loss of Rs. 485.835 million was incurred.
- π Loss from operations amounted to Rs. 512.974 million.
- πΈ Net loss after taxes was Rs. 754.804 million.
- π Loss per share is (Rs. 109.14) compared to (Rs. 67.61) last year.
- β‘ Installation of a 1 MW solar plant is planned to reduce power bills.
- π§Ά Optimizing yarn production based on market factors is underway.
- π€ Support expected from the parent company.
- π° Rationalization and reduction of costs are being implemented.
- β Lean production practices being adopted to improve productivity.
- π« Imported yarn is now subject to sales tax.
- π‘ Prime Minister’s relief package expected to reduce electricity costs.
- π’ Company was incorporated in 1960 and has 64,704 spindles installed.
π― Investment Thesis
Given the significant financial losses, declining revenue, and operational challenges, a SELL recommendation is warranted for JDMT. The company’s efforts to reduce costs and improve efficiency may offer some long-term potential, but the immediate outlook is bleak. Price target: Rs. 500.00, Time horizon: 6 months based on break up value.
Disclaimer: AI-generated analysis. Not financial advice.