Sharp Industries PLC is struggling to revive its business as an electricity crisis has cut production by around 40%, pushing the textile spinner to a Tk72.53 crore loss in FY26 and leaving shareholders without dividends for a second consecutive year.
Daily yarn output has fallen to around 42 tonnes from the installed capacity of 70 tonnes, undermining the company's turnaround efforts following a merger.
Meanwhile, its share price has plunged nearly 75% from its August peak after an unusual rally prompted the Bangladesh Securities and Exchange Commission (BSEC) to order an investigation into its trading.
The stock fell 11.81% to Tk11.20 on Monday, according to Dhaka Stock Exchange (DSE) data.The company reported a net loss of Tk72.53 crore in FY26, against a profit of Tk3.34 crore in FY25. Loss per share stood at Tk2.39, while net asset value per share was Tk7.68.
It will move from the B category to the Z category on 25 October after failing to declare dividends for two consecutive years, according to the DSE.
Power crisis constrains production
Electricity shortages have cut daily output by 40%, limiting revenue generation at a company operating around 1,20,000 spindles.
Sharp Industries, however, sees prospects for recovery, citing confirmed orders for the next six months, higher yarn prices, increased export incentives and reduced pressure from India's anti-dumping measures.
It expects improved power supplies to help raise production and fulfil existing orders. Production disruptions at competing factories could also create opportunities to secure additional orders.
Profit making to loss-making
According to its five-year data available on the stock exchanges, Sharp Industries was a loss-making concern from FY21 through FY23 in a row. After that, it returned to profit in FY24 as it merged with another unlisted entity to expand its business wings.
Following the merger, it remained profitable with rising sales, posting a profit of Tk5.69 crore in FY24 and Tk3.48 crore in FY25.
Now, it has slipped back into the red, incurring heavy losses as per its disclosed information.
Share price tumbles after rally
Sharp Industries shares rose from around Tk17 on 15 June to Tk44.10 on 12 August, gaining about 156% in less than two months.
Following the unusual rise in price and trading volume, the BSEC instructed the DSE to investigate the company's trading activities. The exchange had earlier sought an explanation from the company, which said it had no undisclosed price-sensitive information to explain the movement.
The stock subsequently came under sustained selling pressure, falling to Tk11.20 on Monday, around 75% below its August peak. However, the available information does not establish that the investigation caused the decline.
Merger yet to deliver turnaround
Sharp Industries was formed through the merger of RN Spinning Mills and Samin Food and Beverage Industries and Textile Mills, with the aim of reviving operations and creating expansion opportunities.
RN Spinning Mills suspended operations after a fire in 2019 and had reported losses since FY19. The High Court approved the merger in December 2022, followed by BSEC approval in October 2023. The company began trading on the DSE under the Sharp Industries PLC name on 29 October 2024.