The recent ~28% surge in Mari’s stock, driven by better-than-expected results, a cash payout exceeding consensus, and an unexpected 800% bonus issuance, has pushed the market price above our Jun’25 TP of PkR 3,100.

Moreover, the 10% tax on bonus shares, calculated based on the day-end price on the first day of book closure, would increase Mari shareholders’ holding cost by approximately 9%. However, any positive outcome from Block-28 and Abu Dhabi Block-5 exploration activities would provide an upside risk to our Jun’25 TP.

Meanwhile, the rationalization of energy prices and a focus on recoveries have enhanced cash flow generation for both OGDC and PPL. Additionally, these companies stand to benefit from any positive developments in the Reko Diq and Abu Dhabi offshore Block-5 projects (with Mari also being part of this consortium). Notably, government-owned entities OGDC, PPL, and GHPL hold an equal 25% equity stake in the Reko Diq project. At Abu Dhabi Block-5, the results of the first appraisal well, spudded on Apr 10’24, are still awaited, as the consortium has awarded contracts to drill one shallow exploration well and three appraisal wells.

Subsequently, we like OGDC and PPL in our E&P space, with Jun ’25 TPs of PkR180 and PkR150 providing a capital appreciation of 34%/33% and a dividend yield of 11%/7%.

Courtesy – AKD Research