Topline Pakistan Research predicts Sazgar Engineering (SAZEW) will achieve an EPS of Rs75/share in 4QFY25, marking a 30% YoY increase but a 27% QoQ decline. The company is expected to declare a dividend of Rs 15/share, contributing to an FY25 earnings increase of 119% YoY to Rs 287.6.

Sales are anticipated to rise 23% YoY in 4Q, driven by a 28% increase in four-wheeler sales, although they are down 24% QoQ due to a high base effect. Gross margins are expected to be 31% in 4QFY25, leading to FY25 margins of 30.6%.

Earnings forecasts for FY27-29F have been revised upward by an average of 14%, anticipating the launch of PHEV vehicles before March 2026. Unit sales are estimated at 12,000, 15,000, and 15,750 for FY26-28. The projected EPS for these years are Rs 227, Rs 266, and Rs 295, with gross margins forecasted at 17.0%, 17.2%, and 17.4%, respectively.

Despite a decrease in margins expected due to the expiration of auto policy benefits in June 2026, a BUY stance is maintained, with a target price of Rs 1,667/share, offering a total return of 40%. The company is currently trading at PE ratios of 4.02, 5.38, and 4.60 for FY26, FY27, and FY28, respectively.