The KSE-100 index’s profitability (based on 93% of the index weightage) increased by 1.8% YoY in FY25, reaching PKR 1.66trn. This earnings increase was witnessed on the back of 205%, 119%, 43%, 41%, and 39% YoY in the Investment Banks, Pharmaceuticals, Miscellaneous, Cement and Auto Assemblers respectively.
§ Conversely, decline was recorded in Textiles, Chemicals, Power, E&P and Insurance YoY decrease of 55%, 41%, 40%, 20% and 2% respectively.
§ Commercial Banks: Higher net interest income, non-funded income including capital gains, and lower provisioning contributed to an overall profitability increase of 9% YoY, reaching PKR 592bn in FY25.
§ Oil and Gas Exploration: The sector’s profitability declined by 20% YoY to PKR 351bn in FY25, mainly due to lower international oil prices and a YoY drop of 12% and 8% in oil and gas output, respectively, amid weak demand and production cuts. Additionally, the appreciation of the PKR against the USD and the absence of depletion allowance provisions also contributed to the earnings decline.
§ Fertilizer: Earnings rose 7% YoY to PKR 138bn, primarily driven by FFC. The FFBL–FFC merger (effective FY25) boosted results, along with higher urea margins. Other income also increased on account of increased dividend payouts.
§ Cement: Bottom-line rose by 41% YoY to PKR 155bn in FY25, supported by higher retention prices that improved gross margins, increased other income, and lower finance costs amid a decline in interest rates, higher exports, improved power generation mix.
§ Power: Net profit dropped by 40% YoY to PKR 49bn during FY25, mainly due to the termination of HubCo’s base plant PPA and CPPA-G’s payable adjustments related to Narowal Energy, NPL, and NCPL.
§ OGMCs: Earnings increased by 3% YoY to PKR 71bn in FY25, with margins improving on account of lower inventory losses compared to SPLY, despite pressure from reduced ex-refinery prices and lower volumetric sales.
§ Auto Assembler: The bottom-line rose by 39% YoY to PKR 65bn in FY25, supported by a revival in consumer demand as lower inflation and declining interest rates improved affordability. Stronger volumetric sales further reinforced the increase, the launch of new variants, and a favorable low base effect from last year.
§ Pharmaceuticals: The sector reported a robust 119% YoY growth in earnings to PKR 27bn in FY25, driven by the revision in prices of non-essential medicines, approval of hardship cases, and a decline in international API costs
§ Technology: The sector reported a loss of PKR 5.2bn in FY25, down from PKR 10.2bn last year. PTC’s losses narrowed on the back of higher telecom service pricing and lower finance costs amid declining interest rates, while SYS delivered a 41% YoY increase in profitability, cushioning the sector’s performance.
§ Chemical: Profitability plunged by 41% YoY to PKR 14bn during FY25, which was primarily due to lower international chemical margins and higher gas prices.
§ Textile Composite: The sector’s profitability fell by 55% YoY to PKR 8bn in FY25, primarily due to higher energy tariffs and the inclusion of export goods under the normal tax regime, which led to increased tax burdens.
We have based our analysis on the KSE-100 index and included the results of 79 companies.
§ The companies that have been included in our analysis represent almost 93% of the market capitalization of KSE100.
Courtesy – AHL Research
