Sharp Industries rallies 132% in just six weeks despite Tk65cr loss

Shares of loss-making Sharp Industries have surged 132.35% in just six weeks despite the company reporting a net loss of Tk65 crore in the first nine months of FY2025-26.

Trading in the stock has also increased sharply, although the company says there is no undisclosed price-sensitive information (PSI) behind the rally.

According to data from the Dhaka Stock Exchange (DSE), Sharp Industries' share price rose from Tk17 on 15 June to Tk39.50 on 3 August, gaining Tk22.50 during the period.

The unusual rise in both the share price and trading volume prompted the DSE to seek an explanation from the company on 13 July.

In its response, Sharp Industries said there had been no material developments, including changes in business operations, financial condition, new investments, asset sales, mergers, restructuring or any other corporate event, that could explain the recent surge in its share price.

The company also said it had no undisclosed price-sensitive information related to the movement.

Trading activity has risen significantly in recent weeks, with the stock featuring among the DSE's top-traded issues in several recent sessions.

Sharp Industries emerged from the merger of RN Spinning Mills Limited and Samin Food and Beverage Industries and Textile Mills Limited. RN Spinning had suspended operations following a fire in 2019 and had been incurring continuous losses since FY2018-19. As part of its revival plan, the company merged with Samin Food to resume operations.

The High Court approved the merger in December 2022, while the Bangladesh Securities and Exchange Commission granted its consent in October 2023.

Following the completion of the merger, the company began trading on the DSE under the name Sharp Industries PLC on 29 October 2024.

Despite the restructuring, the company's financial performance remains weak. During the first nine months of FY2025-26, Sharp Industries posted a Tk65 crore net loss on Tk257 crore in revenue.

In the January-March quarter alone, it incurred a Tk21 crore loss while generating Tk56 crore in revenue. As of March 2026, the company's accumulated retained losses stood at approximately Tk78 crore.

Market participants say the sharp rally in the shares of a company that continues to report substantial losses and has shown no visible improvement in its fundamentals is unusual.

They note that Bangladesh's textile sector is still facing significant challenges due to persistent gas shortages and rising production costs, making such a dramatic appreciation difficult to justify based on fundamentals alone.

Under DSE regulations, the exchange seeks explanations whenever a listed company's share price or trading volume shows unusual movements, with the objective of determining whether any undisclosed price-sensitive information exists.

Analysts advise investors to base investment decisions on a company's financial performance and fundamentals rather than short-term price momentum.