Karachi: Suraj Cotton Mills Limited, a prominent player in the Pakistani textile industry, recently held a corporate briefing session to discuss its operational and financial performance for the fiscal year ending June 30, 2025. The session highlighted the company's activities across its two core segments, spinning and weaving, where it produces high-quality cotton yarn and woven fabrics.
The company reported an improvement in profitability ratios, with the gross profit ratio increasing to 8.3% from 8.1% in the previous year, which is a minor move. The operating profit margin remained steady at 8.0%, while the net profit margin saw a moderate move, rising from 3.4% to 4.1%. Return on average equity experienced a minor movement, dropping slightly to 8.7% from 8.8% last year. Meanwhile, return on capital employed decreased significantly, reflecting a big move from 15.7% to 13.7%.
According to information available from the Pakistan Stock Exchange (PSX), Suraj Cotton Mills Limited has a diversified product portfolio that allows it to meet various market demands across Asia and Europe. The company's debt-equity ratio improved to 21:79, signaling a more favorable capital structure compared to the 25:75 ratio recorded in 2024.
The company’s financial statements for the year reported net sales of 27.41 billion rupees, a decrease from 29.74 billion rupees the previous year. Despite this decline, the company maintained a strong financial position with total assets amounting to 24.29 billion rupees.
In terms of liquidity, the current ratio increased to 2.7 times from 2.6 times, while the quick ratio experienced a minor decline, moving from 1.4 times to 1.3 times. Activity ratios showed a mixed performance, with the debtors turnover ratio decreasing to 9.2 times from 10.3 times, while the inventory turnover ratio reduced from 4.6 times to 3.8 times.
The company's cash flow activities reflected a net cash decrease in cash and cash equivalents by 215,363 rupees, ending the year with 163,441 rupees in cash and cash equivalents. Capital expenditure for the year was reported at 894.94 million rupees, indicating continued investment in the company's production capabilities.
The session also revealed that Suraj Cotton Mills Limited benefits from significant long-term relationships with key export customers, contributing to its robust financial performance despite challenging market conditions. As the company moves forward, it aims to leverage its product diversity and market reach to sustain growth and profitability in the coming years.