The profitability of the KSE-100 index continues to soar to new heights, posting a robust growth of 51% YoY in CY23. The growth in profitability during the period was attributable to an enormous surge of 82%, 60%, 55% and 47% YoY growth in Banks, E&Ps, Power and Fertilizers. Commercial Banks: Sector profitability posted 82% YoY growth to PKR 550bn amid higher net interest income due to elevated interest rates.
Oil and Gas Exploration: Profitability of the sector is up by 60% YoY to PKR 480bn during CY23, given currency depreciation, taxation reversal on depletion allowance and exchange gains during the period
Fertilizer: Profitability recorded 47% YoY growth to PKR 94bn owed to 50% higher urea prices alongside a jump in DAP sales by 31%.
Cement: Bottom-line surged by 38% YoY to PKR 100bn amid higher retention prices and lower coal prices, offsetting the impact of volumetric decline (-1% YoY), hike in energy tariff, and currency depreciation.
Chemical: Earnings increased by 34% YoY to PKR 48bn, primarily because of a one-off gain booked by Lucky Core Industries Limited owing to the sale of NutriCo Morinaga.
Power: Net profit increased by 55% YoY to PKR 77bn. The major contribution to this growth comes from HUBC amid i) the addition of local coal-based plants, ii) a higher share of profit from associates and joint ventures, and iii) PKR depreciation.
Auto Assembler: Bottom-line up 72% YoY, settling at PKR 20bn due to low base and better margins amid higher prices of passenger vehicles and tractors.
Refinery: Net profit climbed up by 8% YoY to PKR 26bn owed to inventory gains
Engineering (Steel): Profitability up by 186% YoY to PKR 14bn led by ISL and INIL amid better sales and margins.
Food and Personal Care: Earnings increased by 6% YoY PKR 22bn owing to higher sales alongside better margins.
We have based our analysis on the KSE-100 index and have included the results of 72 companies. The companies included in our analysis represent almost 83.4% of the market capitalization of the benchmark bourse.
Courtesy – AHL Research