Cherat Packaging Ltd

Cherat Packaging Ltd maintains a conservative capital structure with a debt-to-equity ratio of 0.35, indicating moderate leverage relative to its equity base of PKR 8.96 billion. The company holds total assets of PKR 15.62 billion against total liabilities of PKR 6.67 billion, resulting in a current ratio of 1.95, which suggests adequate short-term liquidity to meet immediate obligations. However, the firm reports negative free cash flow of PKR -0.52 billion, driven by capital expenditures of PKR 1.01 billion that exceed operating cash flow of PKR 0.82 billion, highlighting a period of significant investment or cash outflow pressure.

Profitability metrics indicate modest returns, with a return on equity (ROE) of 4.75% and a return on assets (ROA) of 2.72%. The company generated a net income of PKR 0.36 billion on revenues of PKR 13.01 billion, yielding a net margin of approximately 2.74%. Operating income stands at PKR 0.88 billion, reflecting an operating margin of roughly 6.75%, while gross profit is recorded at PKR 1.02 billion, indicating a gross margin of approximately 7.84%. These margins suggest a low-margin business model typical of the packaging industry, where volume and operational efficiency are critical drivers of profitability.

The available data does not provide a detailed breakdown of revenue by segment or geographic region, limiting the analysis of concentration risk within specific product lines or markets. Without segment-specific data, it is not possible to assess the diversification of revenue streams or the relative contribution of different business units to the overall financial performance.

Historical trend data for revenue and net income over the past five years or eight quarters is not provided in the input, preventing a detailed analysis of growth trajectory or cyclicality. The current financial snapshot reflects a single normalized period, and without historical context, the sustainability of current revenue levels and profitability trends cannot be fully evaluated.

Risk assessment indicates medium liquidity risk and low dilution risk, with a key flag noting that net cash is negative after subtracting total debt. The negative free cash flow and significant capital expenditures contribute to the liquidity concern, while the low dilution risk suggests that the share count of 49.10 million shares remains stable with no immediate threat of equity dilution. The company’s reliance on debt financing, with long-term debt of PKR 3.15 billion, adds to the financial risk profile, particularly in a high-interest-rate environment.

Recent filing, news, and transcript observations are not provided in the input data, limiting the ability to incorporate recent corporate events or management commentary into the analysis. The absence of recent event data means that the analysis relies solely on the financial snapshot and risk assessment, without the benefit of qualitative insights from recent disclosures or market news.

Revenue PKR 13.82B, −16,5% YoY; Operating income −34,9% YoY.

• ▍Revenue PKR 13.82B, −16,5% YoY
• ▍Operating income −34,9% YoY
• ▍Net income −2,5% YoY
• ▍Free cash flow +97,1% YoY
• ▍Net margin 6.4%

Revenue PKR 16.55B, +22,6% YoY; Operating income +52,6% YoY.

• ▍Revenue PKR 16.55B, +22,6% YoY
• ▍Operating income +52,6% YoY
• ▍Net income +2,6% YoY
• ▍Free cash flow −148,8% YoY
• ▍Net margin 5.5%

Revenue PKR 13.50B, +20,0% YoY; Operating income +18,9% YoY.

• ▍Revenue PKR 13.50B, +20,0% YoY
• ▍Operating income +18,9% YoY
• ▍Net income +3,6% YoY
• ▍Free cash flow −84,8% YoY
• ▍Net margin 6.6%

Revenue PKR 11.26B; Operating income PKR 1.57B.

• ▍Revenue PKR 11.26B
• ▍Operating income PKR 1.57B
• ▍Net margin 7.6%