Positive

⚡ Flash Summary

Next Capital Limited’s annual report for the year ended June 30, 2025, reveals a significant turnaround, posting a profit after taxation of PKR 28.74 million compared to a loss of PKR 21.73 million in the previous year. This positive shift is attributed to improved market sentiment, increased trading volumes, and effective strategic execution. Brokerage income surged by 96.85%, driven by heightened turnover at the PSX, while advisory income also saw considerable growth. The company proposes transferring 16% shareholding in its subsidiary, Finqalab Technologies, to a co-founder, Mr. Najam Ali, reducing Next Capital’s stake to 60%.

📌 Key Takeaways

• The company achieved a profit after tax of PKR 28.74 million in 2025, a significant reversal from a loss of PKR 21.73 million in 2024. 📈
• Earnings per share (EPS) reached PKR 0.50 in 2025, compared to a negative EPS of PKR -0.38 in 2024. 🚀
• Brokerage income dramatically increased by 96.85%, rising to PKR 238.4 million from PKR 121.130 million. 🏦
• Advisory and related income increased to PKR 92.254 million, demonstrating growing client engagement. 🤝
• A capital loss of PKR 2.670 million was incurred, compared to a capital gain of PKR 47.357 million in the previous year. 📉
• Unrealized re-measurement of investments showed an improvement, resulting in a gain of PKR 940, compared to a loss of PKR 110,452 in the prior year. 💹
• Operating expenses increased by 36.21% to PKR 147.957 million, reflecting the company’s investments in enhancing revenue streams. 💲
• Administrative expenses decreased by 1.65% to PKR 132.599 million, indicating improved cost management. ✅
• Finance costs decreased significantly due to declining discount rates. 📉
• Total assets increased to PKR 1.113 billion from PKR 865.923 million, reflecting overall growth. 🏢
• The company’s board recommends transferring 16% shareholding in Finqalab Technologies to co-founder Najam Ali, reducing Next Capital’s stake to 60%. 🤝
• An AGM is scheduled for October 28, 2025, to approve financial statements, elect directors, and conduct special business related to the Finqalab share transfer. 🗓️
• Total turnover increased to PKR 349.707 million, up from PKR 266.357 million. 📈
• Shareholders’ equity increased to PKR 435.056 million, up from PKR 406.320 million. ⬆️

🎯 Investment Thesis

Based on the available information, a HOLD recommendation appears appropriate. The company has shown improved profitability, however, there are changes in its business strategy to consider which requires observation. A target price cannot be determined without a proper valuation.

⚡ Flash Summary

Next Capital Limited’s financial results for the year ended June 30, 2025, reveal a mixed performance. The company experienced a significant increase in operating revenue, but also faced challenges reflected in fluctuations in investment gains/losses and operating expenses. Despite these headwinds, Next Capital achieved a net profit after income tax, a substantial turnaround from the prior year’s net loss. The company has improved its cash position, and strengthened its equity position.

📌 Key Takeaways

• 📈 Operating revenue increased significantly to PKR 287.56 million, up from PKR 166.55 million in 2024.
• 📉 Capital loss on sale of investments was PKR 2.67 million in 2025, compared to a gain of PKR 47.36 million in 2024.
• ⚠️ Operating expenses rose to PKR 147.96 million, from PKR 108.63 million in the previous year.
• 🏦 Administrative expenses decreased slightly to PKR 132.60 million from PKR 134.83 million.
• ✅ The company reversed PKR 402,370 against loss allowances, contrasting with PKR 10.05 million in 2024.
• 💸 Finance costs decreased to PKR 26.85 million compared to PKR 36.26 million year over year.
• ✨ Other income increased to PKR 64.81 million from PKR 52.56 million.
• 💰 Income before income tax and levy was PKR 38.13 million, a significant improvement from a loss of PKR 3.31 million in 2024.
• 💼 The company reported a profit after income tax of PKR 28.74 million, compared to a loss of PKR 21.73 million in the previous year.
• ✔️ Earning per share was PKR 0.50, a positive shift from a loss per share of PKR 0.38 in 2024.
• 🏦 Total assets increased to PKR 1.11 billion, up from PKR 865.92 million in 2024.
• ✅ Cash and cash equivalents increased to PKR 274.87 million, compared to PKR 75.75 million at the beginning of the year.
• 📉 Accumulated losses decreased to PKR 84.19 million from PKR 112.93 million.
• 👍 Total equity increased to PKR 435.06 million from PKR 406.32 million.

🎯 Investment Thesis

Based on the improved financial performance, I recommend a HOLD position. The company has shown progress, but sustained profitability and efficient cost management are crucial. A price target of PKR 12.00 per share is set, reflecting a modest upside potential based on earnings growth. This recommendation has a medium-term horizon (6-12 months).