Pakistan’s oil marketing company (OMC) sector is expected to see a sharp earnings recovery in 1QFY27, supported by higher petroleum sales volumes and substantial inventory gains amid a rebound in international oil prices, according to a report by AL Habib Capital Markets Pvt Ltd. The brokerage expects Pakistan State Oil (PSO) to post earnings per share (EPS) of Rs42.56 in 1QFY27, up 112.8 percent year-on-year, while Attock Petroleum Limited (APL) is projected to report EPS of Rs49.32, up 61 percent from the same period last year.
On a sequential basis, PSO is expected to return to profitability after reporting a loss in the preceding quarter, while APL’s earnings are forecast to surge by nearly 180 percent quarter-on-quarter. The improvement is largely attributed to stronger sales volumes and inventory gains, reversing the inventory losses recorded in 4QFY26.
According to AL Habib Capital Markets, average motor gasoline (MS) prices rose 31 percent year-on-year to Rs348.54 per litre, while high-speed diesel (HSD) prices rose 39 percent to Rs385.47 per litre during 1QFY27.
Despite elevated fuel prices, overall industry petroleum sales are estimated to have increased by 5.7 percent year-on-year to 4.11 million tons during the quarter. MS volumes grew 4 percent to 2.05 million tons, while HSD volumes fell 3 percent to 1.57 million tons, reflecting higher pump prices and subdued economic activity.
For PSO, volumetric sales are projected at 1.91 million tons in 1QFY27, up 17.6 percent from a year earlier. Net sales are expected to rise 26 percent year-on-year and 14 percent quarter-on-quarter, driven by stronger volumes and higher product prices.
The report forecasts PSO’s market share to rise to 46.4 percent, up from 41.8 percent in the same quarter last year. Gross margins are estimated at 5.1 percent, supported by inventory gains amounting to Rs25.3 billion.
In the LNG segment, PSO reportedly handled three RLNG cargoes during the quarter at an average delivered ex-ship (DES) price of $11.09 per MMBtu, up 38.9 percent from $7.98 per MMBtu recorded in 1QFY26.
Meanwhile, APL’s sales volumes are estimated to rise 11.4 percent year-on-year to 0.36 million tons. Net sales are expected to grow 27 percent, aided by higher volumes and selling prices.
AL Habib Capital Markets projects APL’s market share to improve to 8.8 percent from 8.4 percent a year earlier, while gross margins are expected to recover sharply to 6.1 percent from 2.7 percent in 4QFY26.
The brokerage highlighted inventory gains as the key driver of earnings growth across the sector. It estimates combined MS and HSD inventory gains of Rs25.3 billion for PSO, equivalent to Rs54.02 per share, while APL is expected to record inventory gains of Rs5.5 billion, translating into Rs44.34 per share.
“Inventory gains are expected to play a pivotal role in driving profitability for OMCs during 1QFY27, alongside improving sales volumes,” AL Habib Capital Markets said in its sector outlook.