SNAI

⚡ Flash Summary

Sana Industries Limited’s 40th Annual Report for the year ended June 30, 2025, reveals a challenging year marked by volatile input costs and intense competition in the textile sector. Despite these headwinds, the company achieved a net profit of Rs. 111 million, a significant turnaround from the previous year’s net loss of Rs. 75 million. This profitability was supported by a sharp rise in other income due to the sale of an investment property. The company has not announced a dividend for the year, focusing instead on reinvesting profits for long-term growth and sustainability.

📌 Key Takeaways

• ✅ Sana Industries reports net revenues of Rs. 2,416 million for FY25, a 36.5% decrease from Rs. 3,804 million in FY24.
• 📈 The company turned profitable with a net profit of Rs. 111 million (EPS: Rs. 5.58) in FY25, compared to a net loss of Rs. 75 million (LPS: Rs. 3.78) in FY24.
• 📊 Gross profit stood at Rs. 203 million with a gross profit margin of 8.4%, compared to Rs. 300 million and 7.9% respectively in the previous year.
• 💰 Other income rose sharply to Rs. 327 million, significantly up from Rs. 6.8 million in FY24, primarily due to the sale of an investment property.
• 📉 Finance costs reduced to Rs. 193 million, down from Rs. 250 million last year due to lower interest rates and disciplined financial management.
• ☀️ The company installed a solar power system to improve energy efficiency and reduce reliance on conventional energy sources.
• ⚠️ The synthetic yarn spinning sector in Pakistan continues to face challenges from elevated energy tariffs and policy distortions.
• 🚫 No dividend has been announced for the year due to prevailing economic conditions and upcoming challenges.
• 🗓️ The Annual General Meeting is scheduled for October 27, 2025.
• 🤝 Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered Accountants, are set to retire as auditors but have expressed willingness to be re-appointed for the financial year ending June 30, 2026.
• 🚫 There is non-compliance with Regulation 06 of the Listed Companies Regulations, 2019 as the company does not have one-third independent directors.
• 🏢 Related party transactions with Sana Logistics (Private) Limited and Sana Distributors (Private) Limited amounted to Rs. 7.8 million and Rs. 0.53 million respectively.
• 📜 The directors have confirmed that none of them is serving as a director on more than seven listed companies including Sana Industries Limited.
• 📊 Total meetings held were 4 and they have been attended by the majority of the board members
• 🌐 33-D-2, Block 6, P.E.C.H.S., Karachi is Sana Industries Registered office

🎯 Investment Thesis

Given the mixed financial performance, a HOLD recommendation is appropriate. The company has shown resilience in challenging circumstances and has returned to profitability. However, the absence of a dividend and continued sector headwinds require a cautious approach. An upside catalyst would be a dividend reinstatement driven by further improved profitability or a significant reduction of energy costs due to solar instillation.