Kohinoor Mills Ltd

Kohinoor Mills Ltd maintains a capital structure characterized by significant leverage, with long-term debt of PKR 9.63 billion against total equity of PKR 10.27 billion, resulting in a debt-to-equity ratio of 0.94. The company faces liquidity constraints, evidenced by a current ratio of 0.95, which indicates that current liabilities exceed current assets. Operating cash flow is negative at PKR -34.3 million, and free cash flow is deeply negative at PKR -849.4 million, driven by capital expenditures of PKR 1.62 billion. The key risk flag notes that net cash is negative after subtracting total debt, highlighting a reliance on external financing to meet obligations.

Profitability metrics are extremely weak, with a return on equity of 0.001 and a return on assets of 0.0004. The company generated a net income of PKR 233.5 million on revenue of PKR 27.14 billion, implying a net margin of approximately 0.86%. Operating income stands at PKR 1.57 billion, while gross profit is PKR 3.61 billion. These returns are significantly below typical industry medians for stable textile manufacturers, suggesting operational inefficiencies or cyclical headwinds impacting margin expansion.

Operating income of PKR 808 million in FY-4 demonstrates the company maintained operational profitability despite significant revenue declines.

The company generated a positive net income of PKR 267 million in FY-4, avoiding a net loss despite challenging market conditions.

Dilution risk is assessed as low, suggesting existing shareholders face minimal threat from equity issuance or share count expansion.

Gross profit of PKR 1.7 billion in FY-4 shows the core production process retains some margin before operating expenses are deducted.

The company faces high credit risk, suggesting significant concerns regarding its ability to meet debt obligations or maintain financial stability.

Net margin of 0.04% ranks in the bottom quartile of its cohort, highlighting extremely poor profitability relative to industry peers.