Qudsia Bano

Unity Foods Limited has demonstrated a resilient performance, showcasing a 1% year-on-year growth in revenue, reports WealthPK quoting the company’s latest quarterly financial report. As of September 30, 2023, the company reported a total revenue of Rs19.71 billion, compared to Rs19.52 billion in the same period last year. This marginal increase suggests a stable market presence for the company despite potential economic challenges. One of the most notable highlights of the report is the substantial growth in gross profit, which soared by an impressive 302%, reaching Rs2.34 billion, up from Rs582.9 million in the corresponding period of the previous year. This remarkable increase is likely attributed to the strategic business decisions, cost management, or increased sales efficiency, showcasing the company's ability to capitalize on the market opportunities and enhance its overall profitability.

The other income category also witnessed a positive trend, with a 33% increase from Rs174.05 million in the previous year to Rs231 million in the current quarter. Despite the challenges faced in the previous year, Unity Foods Limited managed to reverse its financial trajectory, reporting a profit before taxation of Rs150.67 million. This is a substantial turnaround from the corresponding period last year, which saw a loss before taxation of Rs2.52 billion. However, a net loss after tax of Rs280.99 million was reported, albeit significantly lower than the previous year's loss of Rs2.24 billion. The earnings per share also reflect this improvement, showing a decrease from a loss of Rs1.88 to Rs0.24. While the company is still on the path to full recovery, these figures indicate a positive momentum, instilling confidence among the stakeholders, reports WealthPK.

Gross Profit Margin

The gross profit margin, a key indicator of operational efficiency, has witnessed a consistent upward trend. In FY2023, the margin stands at 13.46%, compared to 9.55% and 7.82% in FY 2022 and FY 2021, respectively.

Net Profit Margin

While the gross profit margin portrays a positive trajectory, the net profit margin shows a declining trend. In FY2023, the net profit margin was 0.63%, down from 2.96% in FY 2022 and 4.69% in FY 2021.

EPS Growth

The Earnings Per Share (EPS) growth provides a snapshot of the company's profitability on a per-share basis. In FY2023, the company reported a significant decrease in EPS growth, showing a decline of 76.47%. This contrasts with the negative growth of 42.70% in FY 2022 and a remarkable EPS growth of 917.14% in FY 2021. The negative EPS growth in FY2023 implies a reduction in earnings available to shareholders, signaling potential challenges in sustaining or increasing profitability.

PEG Ratio

The Price/Earnings to Growth (PEG) ratio is a valuable tool for assessing a company's valuation relative to its earnings growth. A PEG ratio below 1 is generally considered favorable. The company’s PEG ratio is negative in FY2023 and FY2022, standing at -0.43 and -0.23, respectively. This indicates that the company's stock may be undervalued relative to its earnings growth.

About the company

Unity Foods Limited was incorporated in Pakistan in 1991 as a private limited company under the Companies Ordinance, 1984 (now Companies Act, 2017) and subsequently converted into a public limited company on June 16, 1991. The principal business activity of the company has changed from yarn manufacturing to edible oil extraction, refining, and related businesses.

Credit: INP-WealthPk