Intermarket Securities Limited has estimated PSO’s 1QFY24 earnings to arrive at PKR17.4bn (EPS: PKR37.12) vs NLAT of PKR4.6bn (LPS: PKR9.85) in 4QFY23. The expected increase in earnings is on the back of higher inventory gains that are expected to clock in at PKR26.0bn in 1QFY24 which should increase PSO’s GM to 5.2% from 1.9% in the previous quarter.

As per our estimates, net revenue is expected at PKR976.2bn with a QoQ increase of 11.7%. Sequential improvement in revenue is owing to increase in PSO’s volumes by 5.05% QoQ coupled with elevated petroleum price in the quarter. Circular debt poses a major challenge for PSO and estimated finance cost of PKR16.8bn in 1QFY24 may hurt the company’s earnings.