β‘ Flash Summary
First Tri-Star Modaraba reported a loss for the year ended June 30, 2025, contrasting with a profit in the previous year. The company experienced a significant decrease in operating profit and a substantial loss after taxation, primarily driven by increased administrative expenses and financial charges. Despite a rise in income from academic activities, the company’s profitability suffered. The balance sheet shows a slight increase in total assets, but a decrease in certificate holders’ equity due to the current year’s loss.
π Key Takeaways
- π First Tri-Star Modaraba reported a loss of PKR 15.03 million for the year ended June 30, 2025, compared to a profit of PKR 1.66 million in 2024.
- π Loss per certificate (basic and diluted) stood at PKR (0.71) in 2025, against earnings of PKR 0.08 in 2024.
- β¬οΈ Income from academic activities increased to PKR 36.18 million in 2025 from PKR 34.83 million in 2024, a 3.9% rise.
- β¬οΈ Administrative expenses surged to PKR 56.78 million in 2025 from PKR 33.07 million in 2024.
- β¬οΈ Financial charges increased to PKR 2.11 million in 2025 from PKR 1.91 million in 2024.
- β¬οΈ Operating loss amounted to PKR 13.61 million in 2025, compared to an operating profit of PKR 0.58 million in 2024.
- β¬οΈ Other comprehensive income increased substantially to PKR 53.97 million in 2025 from PKR 38.42 million in 2024.
- β¬οΈ Total assets increased to PKR 586.60 million in 2025 from PKR 565.31 million in 2024.
- β¬οΈ Certificate holders’ equity decreased to PKR 353.38 million in 2025 from PKR 410.73 million in 2024.
- β¬οΈ Surplus on revaluation of investments increased to PKR 89.04 million in 2025 from PKR 35.07 million in 2024.
- β¬οΈ Short-term investments increased to PKR 0.49 million in 2025 from PKR 0.39 million in 2024.
- β¬οΈ Cash and bank balances increased to PKR 2.99 million in 2025 from PKR 1.61 million in 2024.
- β¬οΈ Accrued and other liabilities increased to PKR 43.01 million in 2025 from PKR 29.51 million in 2024.
π― Investment Thesis
Given the loss reported, the rising administrative costs, and the overall negative trajectory, a SELL recommendation is warranted. The company’s financial performance raises significant concerns about its ability to generate sustainable profits. While the increase in assets looks good, liability is a real concern. In the absence of a clear turnaround strategy and considering the limited information about the Modaraba’s operations and sector, the downside risk outweighs any potential upside. I’d avoid the stock with a target price of PKR 7 which will be book value, which is unlikely to be achieved in the short term, considering the current financials and a time horizon of 6-12 months.
Disclaimer: AI-generated analysis. Not financial advice.