SITC

⚡ 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.

⚡ Flash Summary

Sitara Chemical Industries Limited (SCIL) reported a 4.09% increase in net sales, reaching PKR 7,918 million for the first quarter of 2025-26, compared to PKR 7,607 million in the same period last year. Gross profit increased by PKR 206 million to PKR 1,378 million. The improvement in gross margin was driven by lower electricity costs and a decrease in international coal prices. Consequently, SCIL achieved a profit after tax of PKR 349 million, significantly higher than the PKR 155 million in the corresponding quarter of the previous year, resulting in an EPS of PKR 16.29 compared to PKR 7.25.

📌 Key Takeaways

• 🚀 Net sales increased by 4.09% to PKR 7,918 million compared to PKR 7,607 million in the previous year.
• 💰 Gross profit rose by PKR 206 million, reaching PKR 1,378 million.
• ⚡️ Improved gross margin due to lower electricity costs and reduced international coal prices.
• 📉 Financial expenses decreased to PKR 349 million from PKR 608 million due to lower borrowing rates.
• 🧵 Stable textile segment performance with consistent yarn and fabric sales.
• 📈 Profit after tax surged to PKR 349 million from PKR 155 million.
• ⭐ Earnings Per Share (EPS) increased significantly to PKR 16.29 from PKR 7.25.
• 🏭 New 50 MW coal-fired power plant commissioning is underway.
• 🏦 Expectation of a favorable business outlook due to reduced energy costs and stable monetary policy.
• ⚠️ Potential risk of food inflation due to recent flooding may pressure macroeconomic growth.
• 🌱 The company is Shariah Compliant Company certified by SECP.
• 🤝 Board acknowledges shareholders, customers, suppliers, financial institutions, and employees.

🎯 Investment Thesis

Considering the improved financial performance, especially the substantial increase in EPS and profit after tax, alongside a stable textile segment and reduced financial expenses, a BUY signal is warranted. The forthcoming commissioning of the new power plant could further reduce energy costs and boost profitability. Target price can be estimated after a full financial report. The time horizon is MEDIUM_TERM as the benefits of new power plant and stable monetary policy are expected to materialize over the coming quarters.

⚡ Flash Summary

SITC announced: Credit of Final Cash Dividend. Basic analysis suggests positive sentiment. Professional review recommended.

📌 Key Takeaways

• SITC made announcement: Credit of Final Cash Dividend
• Automated analysis: BUY signal detected
• Signal strength: 7/10
• This is basic analysis – manual review recommended
• Professional CFA analysis unavailable

🎯 Investment Thesis

Basic BUY indication for SITC. Manual verification required.