YoY growth in IT exports during the month is due to (1) IT export companies growing client base globally, especially in the GCC region, (2) relaxation in the permissible retention limit by the State Bank of Pakistan, increasing it from 35% to 50% in the Exporters’ Specialized Foreign Currency Accounts, (3) allowance of equity investment abroad through these foreign currency accounts and (4) stability in PKR encouraging IT exporters to bring higher portion of profits back to Pakistan.

§  According to a Pakistan Software Houses Association (P@SHA) survey, 62% of IT companies are maintaining specialized foreign currency accounts.

§  In our view, SBP’s introduction of Equity Investment Abroad (EIA), allowing IT exporters to acquire interest in entities abroad using up to 50% proceeds from specialized foreign currency accounts, will continue to boost the confidence of IT exporters to remit proceeds back to Pakistan.

§  Net IT Exports (Exports-Imports) displayed a monthly number of US$330mn, which is an increase of 29% YoY and 8% MoM. These net IT export numbers in Sep-25 are higher than the last 12-month average of US$286mn.

§  While the government has set a target of US$5bn for FY26, we expect IT exports to grow by 18-20% during the year.

§  Under the ‘Uraan Pakistan’ national economic plan, the government has also set an FY29 target of US$10bn IT exports. This implies a target CAGR of 27% till FY29.

§  Within the IT sector, Systems Limited (SYS) is our preferred pick. SYS is currently trading at a 2025E and 2026F PE of 21.6x and 16.1x, respectively.