MIXED

⚡ Flash Summary

Sitara Energy Limited’s (SEL) annual report for the year ended June 30, 2025, reveals a sharp decline in sales revenue but a significant turnaround in net profit. Sales plummeted to Rs. 176.070 million due to decreased demand from Bulk Power Consumers (BPCs), attributed to high electricity costs. However, substantial reductions in finance costs, stemming from debt rescheduling and lower SBP policy rates, propelled the company to a net profit of Rs 167.137 million, a considerable increase from the previous year. Despite challenges, earnings per share (EPS) rose to Rs 8.75, marking a positive shift in financial performance.

📌 Key Takeaways

• 📉 Sales plummeted to Rs. 176.070 million in FY2025 from Rs. 916.056 million in FY2024 due to decreased demand from BPCs.
• 📉 Gross loss of Rs. 38.592 million in FY2025 vs. a gross profit of Rs. 7.270 million in FY2024.
• ✅ Net profit surged to Rs. 167.137 million in FY2025 from Rs. 41.991 million in FY2024.
• 📈 EPS increased to Rs. 8.75 in FY2025 from Rs. 2.20 in FY2024.
• 💰 Finance costs significantly reduced to Rs 53.923 million from Rs 163.235 million due to debt rescheduling and policy rate cuts.
• ⚡️ SBP policy rate lowered to 11% in May 2025 from 19.50% in July 2024, aiding cost reduction.
• ☀️ Company installed a 1 Megawatt solar power plant, commencing commercial production on October 1, 2024.
• 🏢 The company donated Rs. 784,620 to welfare institutions operating in education in 2025, up from Rs. 617,350 in 2024.
• 🤝 Company plans further addition of solar power subject to conducive regulatory framework and timely approvals.
• ⚖️ Appellate Tribunal (NEPRA) set aside prior decisions, directing fresh review of impugned decisions.
• 🔒 Audit Committee recommended re-appointment of M/S RSM Avais Hyder Liaquat Nauman as auditors.
• 📜 Directors highlight compliance with the Companies Act, 2017, and Corporate Governance regulations.
• 🌍 The company donated Rs. 784,620 in FY25 to the welfare institution, from Rs. 617,350 in FY24.
• 👩 CEO Javed Iqbal’s remuneration remained the same as last year.

🎯 Investment Thesis

Given the mixed signals—challenging revenue environment offset by improved profitability—a HOLD recommendation is appropriate. A BUY signal would require evidence of sustained revenue recovery and resolution of regulatory uncertainties. A SELL signal could be considered if liquidity issues worsen or regulatory approvals remain unfavorable. A price target cannot be confidently specified without further in-depth analysis and sector benchmarking. The near-term to medium-term horizon remains uncertain.