Market Wrap: Highlights of the day - By JS Research

May 22 2025

JS Global Capital

• The market opened on a positive note on Thursday, with the index gaining 767 points to hit an intraday high of 120,699. However, the momentum faded as investors opted for profit-taking at higher levels, dragging the index down to an intraday low of 119,062 before closing at 119,153, down 778 points. Going forward, range-bound activity is likely to persist ahead of the Federal Budget announcement, and investors are advised to remain cautious."

Sazgar Engineering Works (SAZEW): Corporate Briefing Key Takeaways - By Topline Research

May 22 2025

Topline Securities

• The management of Sazgar Engineering Works (SAZEW) held it's corporate briefing today to discuss the financial results for 3QFY25 and share the company's future outlook.

• SAZEW plans to complete its four-wheeler manufacturing expansion by March 2026 and introduce new NEV models. The company will also focus on expanding its export markets (mainly three wheelers) and the local dealership network. Sazgar currently has a network of 20 four-wheeler dealers, with expansion underway as new centers in Mardan and Peshawar are set to open soon.

• The production capacity of the company will increase from 40-50 cars a day to 90-100 cars a day post expansion.

Sazgar Engineering Works Ltd. (SAZEW): 9MFY25 Analyst Briefing Takeaways - By AKD Research

May 22 2025

AKD Securities

• Sazgar Engineering Works Ltd. (SAZEW) held its analyst briefing to discuss 9MFY25 results and its future outlook. Following are the key highlights:

• To recall, company posted topline of PkR81.4bn in 9MFY25 vs PkR34.6bn in 9MFY24, an increase of 2.4xYoY. The said increase is primarily attributed to higher volumetric sales of four wheelers, particularly HAVAL.

• Company posted earnings of PkR12.9bn (EPS: PkR212.7) in 9MFY25, compared to PkR4.4bn (EPS: PkR73.6) in SPLY, an increase of 2.9xYoY.

Economy: Pakistan Federal Budget FY26 Preview Fiscal consolidation to continue; Third consecutive year of primary surplus - By Topline Research

May 22 2025

Topline Securities

• Fiscal consolidation to continue: Pakistan is set to announce Federal Budget FY26 on Jun 02, 2025. We expect this budget to continue fiscal consolidation, focus on IMF guidelines and bring untaxed/low tax areas in tax net. Furthermore, we believe, this Budget FY26 hold high importance from policy point of view as various additional legislative engagements are likely to be undertaken i.e. inclusion of Section 114c, National Tariff Policy, Captive Power Levy Ordinance, removing cap on Debt Servicing Surcharge (DSS) amongst others.

• Government’s commitment to IMF for FY26 Budget: Government has committed with IMF to continue with fiscal consolidation in FY26 budget to ensure debt sustainability. The government targets primary surplus of 1.6% of GDP (vs. 2.0-2.1% of GDP in FY25), a surplus for third consecutive year after 2 decades. The govt. has also committed to use any windfall dividend expected from central bank over and above 1% of GDP to retire debt.

• FBR FY26 Tax revenue growth target could be lowest in 6 years: FBR revenue target is expected at Rs14.1-14.3tn, up 16-18% YoY, which will be a lowest % growth in last 6 years. FBR has achieved 5-year revenue CAGR of 25% from FY21-25. We believe, out of this required 16-18% growth, ~12% would be achieved through autonomous growth driven by real GDP growth of 3.6% and inflation of 7.7%. The remaining 4-5% growth translates into additional tax measures of Rs500-600bn, we estimate.

Power: Apr’25 generation up 22%YoY / 25%MoM - By Topline Research

May 22 2025

Topline Securities

• Power generation in Apr’25 clocked in at 10,511GWh, reflecting a 22%YoY increase and a 25%MoM jump, driven by seasonal recovery in demand as temperatures rose. This marks a significant rebound from Mar’25, when generation stood at 8,409GWh, following a dip to 6,945GWh in February due to winter-related slowdown in both household and industrial consumption.

• Cumulatively, 10MFY25 power generation stood at 100,658GWh, reflecting a slight 0.3% YoY decline compared to 100,966GWh in the SPLY.

• Hydel generation saw a sharp rebound, increasing by 78%MoM and 11%YoY, contributing 2,306GWh—driven by higher power demand. Coal-based generation, which was the highest contributor in the mix, surged 1.9xYoY to 2,579GWh and rose 33%MoM— likely due to improved plant availability and lower global coal prices. However, nuclear generation declined by 8%YoY and 15% MoM, contributing 1,882GWh. Meanwhile, generation from expensive sources like furnace oil and HSD dropped to just 1% of the mix, in line with the Government’s continued shift toward more cost-efficient and sustainable energy sources.

Pakistan Power: Power generation marks highest YoY growth since Apr-2022 - By JS Research

May 22 2025

JS Global Capital

• As per latest data released by National Electric Power Regulatory Authority (NEPRA), Power generation during Apr-2025 clocked in at 10,513GWh, posting a significant increase of 22% YoY. Cumulatively, power generation during 10MFY25 remained flat with a marginal dip of 0.4% YoY, clocking-in at ~100,661GWh.

• Average cost of generation for Apr-2025 stood at Rs8.95/kWh, remaining flat YoY. Nevertheless, on a sequential basis, average cost dipped 3%.

• The sequential decline in generation cost is mainly attributable to higher contribution from Hydel plants in generation which stood at 22% in the energy mix during Apr-2025 compared to 15% during the last month.

Technical Outlook: KSE-100 entering the resistance range - By JS Research

May 22 2025

JS Global Capital

• The KSE-100 index showed positive movement to close at 119,931, up 960 points DoD. Volumes stood at 668mn shares compared to 438mn shares traded in the last session. The index is expected to face resistance at 120,797 (all-time intraday high) as a break above may start a new momentum towards 123,375 and 125,947 levels, respectively. However, any downside will find support between 118,740 and 119,340 levels. The RSI and the MACD have moved up, supporting a positive view. We recommend investors to ’Buy on dips’, keeping stoploss below 118,527. The support and resistance levels are at 119,338 and 120,315, respectively.

Morning News: IMF yet to decide on budget relief request - By Vector Research

May 22 2025

Vector Securities

• Seeking effective and practical steps for the realisation of agriculture income tax and improvements in retail sector taxation, the International Monetary Fund (IMF) has yet to take a position on Pakistan’s request for relief measures in the upcoming budget, due on June 2.

• Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said that Pakistan’s exports to United States of America (USA) is $4.4 billion as compared to imports of US$1.9 billion with the trade surplus of $2.5 billion during current Financial Year 2024-25 (up to March).

• Pakistan’s total investment plunged into the lowest range despite a slight improvement in the outgoing fiscal year 2024-25, mainly due to the assumption of reliance on increased public investments. Private sector investment stagnated, standing at 9.1 percent in the current fiscal year compared to 9 percent in the last financial year.

Morning News: $2.5bn surplus in trade with US: Aurangzeb - By WE Research

May 22 2025

• Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, reported that Pakistan recorded a trade surplus of $2.5 billion with the United States during the current financial year 2024-25 (up to March), with exports at $4.4 billion and imports at $1.9 billion. In the previous year, 2023-24, exports were $5.3 billion and imports $2.2 billion, resulting in a $3.1 billion surplus. Key exports include garments and medical instruments, while major imports consist of cotton, steel scrap, computers, and petroleum products. The U.S. has imposed a 30% reciprocal tariff on Pakistani imports, currently suspended for 90 days, which exporters see as a challenge but also a potential opportunity due to higher tariffs on competitors. In response, the prime minister has formed a Steering Committee and a working group, with the Ministry of Commerce coordinating a comprehensive strategy to engage with U.S. authorities.

• Gold prices in Pakistan rose significantly on Wednesday, with 24-karat gold reaching Rs349,400 per tola after an increase of Rs6,600, and 10 grams priced at Rs299,554, up Rs5,659, according to the AllPakistan Gems and Jewelers Sarafa Association. The price of 22-karat gold also increased to Rs274,601 per 10 grams. Silver prices followed suit, with 24-karat silver rising to Rs3,466 per tola and Rs2,971 per 10 grams. Internationally, spot gold traded near $3,302 an ounce, up 0.39%, marking its third consecutive daily gain, driven by a softer dollar and heightened safe-haven demand amid global economic and geopolitical uncertainties.

• Pakistan’s per capita income rose by 9.75% to a record $1,824 in FY2024–25, up from $1,662 the previous year, with the economy’s total size reaching $410.96 billion—a 2.68% annual increase—according to provisional estimates by the Pakistan National Accounts Committee (NAC). In rupee terms, per capita income grew 8.27% to Rs509,174. This growth, driven mainly by a 3.99% rise in the services sector and a modest 1.18% increase in agriculture, helped Pakistan join the world’s 40 largest economies, despite a continued 1.14% contraction in the industrial sector. The NAC also revised earlier quarterly GDP growth estimates and finalized FY23 growth at -0.21% and FY24 at 2.51%. Analysts see the rebound as a sign of resilience amid global and domestic challenges, marking the highest GDP since FY18, when it last approached similar levels before facing economic and political instability.

Power Cement Ltd. (POWER): 9MFY25 Analyst Briefing Takeaways - By AKD Research

May 21 2025

AKD Securities

• Power cement Ltd. (POWER) held its analyst briefing today to discuss the 9MFY25 financial results and future outlook of the company. Following are the key points:

• To recall, company posted profit of PkR348mn (EPS: PkR0.07) in 9MFY25 compared to a loss of PkR1.2bn (LPS: PkR1.41) in SPLY. The said improvement in profitability was primarily attributable to lower financial charges (down 35%YoY) during the period amidst falling interest rates and improved operating efficiencies.

• Company’s total offtakes for 9MFY24 decreased by 19%YoY to 1.7mn tons. This was due to decrease in clinker exports amid falling prices in the international market. Avg. export prices for clinker during the period stood at ~US$30-31/ton