AHL Research Ltd has published a promising outlook on Sitara Petroleum Service Ltd (SPSL), highlighting the company’s transition into its next growth phase. The report underscores SPSL’s plan to expand its retail network from 70 fuel stations to 107 by June 2027, a move expected to boost motor spirit (MS) and high-speed diesel (HSD) volumes, strengthen market share, and generate recurring cash flows.

The company is also developing a 30,000 MT oil storage terminal in Faisalabad and investing strategically in Pakistan’s emerging EV ecosystem, which will diversify revenue streams and enhance prospects for an OMC license. SPSL’s resilient business model—anchored by 40% corporate sales, a high-margin logistics arm, GO volumetric incentives of about PKR 5/litre, and minimal inventory exposure—provides stable earnings with limited oil price risk.

Following GO’s acquisition, SPSL has delivered a strong turnaround, with net profit projected to reach PKR 9.54 billion by FY30, reflecting a 24% CAGR. Despite industry-leading profitability, the stock trades at only 5.9x/5.0x FY26/27e P/E, below the sector average of 8.5x. AHL maintains an Outperform stance, setting a target price of PKR 24.97/share by June 2027, implying 35% upside potential for investors.

This positions SPSL as a compelling growth investment opportunity in Pakistan’s energy sector