Strength-5

⚡ Flash Summary

Pak Agro Packaging Ltd reported its corporate briefing session on November 24, 2025. The company experienced a slight increase in sales revenue by 2.99%, reaching PKR 858.693 million. However, gross profit decreased by 10.85% to PKR 119.556 million, leading to a decline in the gross profit margin from 16.08% to 13.92%. This decrease in profitability is attributed to unstable exchange rates and a reduction in sales volume due to decreased customer purchasing power and increased competition.

📌 Key Takeaways

• 📈 Sales revenue increased slightly by 2.99% to PKR 858.693 million.
• 📉 Gross profit decreased significantly by 10.85% to PKR 119.556 million.
• ⚠️ Gross profit margin declined from 16.08% to 13.92%.
• 📦 Sales quantity remained relatively stable, increasing slightly by 0.2% to 1,506 MTs.
• 📉 Operating profit decreased by 14.45% to PKR 93.117 million.
• 📉 Profit before tax decreased by 24.57% to PKR 60.792 million.
• 📉 Profit after tax decreased by 18.57% to PKR 31.934 million.
• 📉 Earnings per share (EPS) decreased by 18.57% to PKR 1.59.
• ⬆️ Equity increased by 7.92% to PKR 443.937 million.
• ⬆️ Net fixed assets increased by 2.48% to PKR 468.966 million.
• ⬇️ Current assets decreased by 4.06% to PKR 197.916 million.
• ⬆️ Net working capital increased significantly by 82.77% to PKR 65.921 million.
• 🌐 Unstable exchange rates continue to pose a challenge.
• 📉 Decrease in sales volume due to reduced customer purchasing power and increased competition.

🎯 Investment Thesis

Given the declining profitability and challenging market conditions, a HOLD recommendation is appropriate for GEMPAPL. While the company has shown some growth in sales and equity, the significant decrease in profits and EPS raises concerns. Further monitoring of the company’s performance is necessary to assess its ability to improve profitability and manage risks effectively. The price target should remain unchanged until there are clear signs of improvement in financial performance. The time horizon is medium-term (6-12 months).