IT Exports Jumped 9% MoM in Nov 2023; Exports up 6% YoY in 5MFY24

Pakistan’s Information Technology (IT) exports of US$259mn are up by 9% MoM in Nov-2023. IT exports in Nov 2023 are also higher than last 12 month average of US$222mn. As per channel checks, MoM jump is due to (1) relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), increasing it from 35% to 50% in the Exporters’ Specialized Foreign Currency Accounts and (2) stable PKR currency which encourage IT companies to repatriate their foreign income and deposit it in local accounts.

To highlight, the reported IT export number indicates the amount remitted back to Pakistan by technology companies. As per the IT Minister, IT companies have parked an estimated US$1-2bn outside of Pakistan.

Segment-wise, Computer services are up 14% MoM, and Information Services up 3% MoM, while Telecom services are down 11% MoM.

Among Computer Services, Other Computer Services and Export of Computer Software up 28% MoM and 14% MoM respectively.

On a YoY basis, IT export for Nov 2023 is also up by 11% YoY to US$259mn due to 20% YoY increase in export of Computer Services.

In 5MFY24, IT exports have increased by 6% YoY to clock in at US$1.2bn.

Net IT Exports (Exports-Imports) for Nov 2023 reported an increase of 11% MoM and 7% YoY to US$226mn. In 5MFY24 Net IT Exports recorded a growth of 6% YoY to US$988mn.

Net IT Exports on TTM basis as of Nov 2023 also have increased by 10% YoY to US$2.4bn.

In 5MFY24, gross IT exports as percentage of total exports was reported at 7.4% compared to 7.3% in 5MFY23.

Telecom services/Computer Services export mix for Nov 2023 is recorded at 17%/83% respectively compared to 24%/76% mix in Nov 2022.

In 5MFY24, Telecom Services/Computer services export mix is recorded at 19%/81% compared to 20%/80% in 5MFY23.

According to Gartner Inc. (a Technology Research and Consulting firm), worldwide spending on software to grow at 13.8% and spending on IT services to increase by 10.4%.

MENA software spending is expected to record double-digit growth of 12.3% in 2024, followed by IT services spending growing at 11.1% next year, to accelerate digitalization and increasing automation, as per Gartner.

This presents an opportunity for companies such as Systems Limited (SYS), which is our preferred pick in the IT sector. Since 53% of the revenue generated by SYS is sourced from MENA region, so robust growth in that region will directly benefit SYS.


SYS currently trades at a 2024F PE of 10.8x and PS of 1.8x.

Courtesy – Topline Pakistan Research 

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