PRET

⚡ Flash Summary

Premium Textile Mills Limited (PRET) reported an operating income of PKR 2,800.3 million for the year ended June 30, 2025, a slight decrease from PKR 2,842.3 million in FY2024. Profit after taxation significantly improved to PKR 190.9 million compared to a loss of PKR 452.1 million in FY2024. The company declared a dividend of Rs 2 per share, a welcome return to shareholder distributions after no dividend in the previous year. The annual report highlights the company’s commitment to sustainability and renewable energy initiatives.

📌 Key Takeaways

• ✅ Operating income decreased slightly from PKR 2,842.3 million in FY2024 to PKR 2,800.3 million in FY2025.
• 📈 Profit after taxation turned positive at PKR 190.9 million, a substantial improvement from a loss of PKR 452.1 million in FY2024.
• 💰 A dividend of Rs 2 per share was declared, compared to no dividend in FY2024.
• 📉 Gross margin declined from 14.12% in FY2024 to 13.37% in FY2025.
• 📊 Operating profit margin decreased from 10.49% in FY2024 to 9.65% in FY2025.
• 💪 Total equity increased to PKR 8,748.3 million from PKR 8,515.1 million in FY2024.
• ✔️ Basic earnings per share improved to PKR 30.98 from a loss of PKR 73.36 in FY2024.
• ☢️ Total assets decreased slightly to PKR 29,464.1 million from PKR 30,539.8 million in FY2024.
• 🌱 Renewable energy initiatives are underway, with solar capacity increasing to 19.8 MW and plans for wind turbines.
• 🌍 Partnership with WWF Pakistan for organic cotton project is ongoing, covering 8,000 acres.
• ♻️ Focus on sustainable materials with recycled yarn and Luna yarn.
• ⚖️ Diversity and inclusion emphasized with various programs and gender pay gap reported.

🎯 Investment Thesis

Premium Textile Mills exhibits mixed signals. Improved profitability and a return to dividends are positive, but a slight decline in revenues and margins warrants caution. The company’s sustainability initiatives and strategic energy shifts are encouraging for long-term value. As the company has made an announcement for the next general meeting, and to give a chance for market to take positions I suggest a Hold.

⚡ Flash Summary

Premium Textile Mills Ltd. reports a mixed financial performance for the year ended June 30, 2025. While operating income decreased slightly, the company turned profitable with a profit after taxation of PKR 190.9 million compared to a loss of PKR 452.1 million in the previous year. The board recommends a final cash dividend of Rs 2.00 per share. The company focuses on sustainability and risk management.

📌 Key Takeaways

• ✅ Profit after tax turned positive: PKR 190.9 million vs PKR (452.1) million loss last year
• 📉 Operating Income slightly down: PKR 2,800.3 million vs PKR 2,842.3 million
• 💰 Dividend declared: Rs 2.00 per share (20%)
• 🌿 Focus on renewable energy: Solar and wind power initiatives
• 🤝 Partnership with WWF: Launching an organic cotton project
• ♻️ Emphasis on sustainable materials: Luna yarn, regenerated yarn, and tri-blend yarn
• 👩‍💼 Commits to gender equality: Hiring more women in leadership roles
• 🌍 Investment in Effluent Treatment Plant (ETP): For environment preservation
• ⚙️ Modernizing machinery every three years: To stay competitive
• 📊 Gross Margin declined to 13.37% from 14.12%
• 💵 High dependence on long term and short term finance
• ⚠️ Inflationary pressure on Fuel & Energy costs
• 🧶 Spinning & socks division performed well compared to previous periods
• ⚖️ Significant increase in Median Gender Pay Gap, needs reviewing

🎯 Investment Thesis

Given the mixed financial results, the current economic climate, and the various risks, a HOLD recommendation is appropriate. The turnaround in profitability is a positive sign, but the declining gross margin and increasing expenses warrant caution. A HOLD recommendation is given as further information is required. A price target is not provided due to uncertainties.