Annual Strategy: Pakistan Market Strategy 2025 Breaking Barriers: KSE-100 Marches Toward 148K – By Sherman Research

Dec 20 2024


Sherman Securities


  • Pakistan’s KSE 100 index is all set to generate total return of 40%, breaching 148k level during CY25. Market is expected to reach target PE of 8x in line with last 10-year average PE versus current PE of 6.1x. Target PE of 8x is justified considering Pakistan’s economic outlook as most of the indicators are in line with average of last 10 years.
  • After meeting all the key performance indicators specially during last 2 years (maintaining primary budget surplus, tight monetary policy, energy sector reforms and regulating FX market), Pakistan is now looking at raising tax to GDP which is expected to be key performance criterion for timely disbursement under new IMF Program of US$7bn.
  • With inflation to remain below historical average and lower risk to external accounts during IMF Program, we expect policy rate to remain around 10% during next 2 years. Considering ample institutional liquidity, we expect diversion of Rs1.2-1.5trn funds (40% of the free float of KSE-100 Index) during CY25 from fixed income to equity market. Not only this, stable currency and cheap valuations will induce Foreigners’ interest in Pakistan market as they have been net sellers so far.

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Commercial Bank: 1QCY25 Universe earnings to grow 13%QoQ - By Taurus Research

Apr 18 2025


Taurus Securities


  • We expect 1QCY25 TSL Banking Universe earnings to grow 13% QoQ on account of lower cost of funds and provisions. Wherein, UBL and BAFL have already announced their results posting 39% QoQ growth and 52%QoQ growth in profitability, respectively. On an annualized basis, we anticipate earnings to go up 5%.
  • During the period, the State Bank of Pakistan cut its policy rate by 100bps to 12%. Resultantly, the industry spread on outstanding loans and deposits is estimated to have averaged ~6.50% as compared an average of 5.39% in the previous quarter—on the back of the re-pricing lag between the assets and the liability side.
  • Nevertheless, we anticipate a cumulative re-pricing of ~900bps in asset yields to have taken place by the period when compared to the corresponding period last year. Hence, affecting the interest incomes, specially on the investment books.
Pakistan Fertilizer: 1QCY25E Result Preview: Muted offtakes to weigh on profitability - By AKD Research

Apr 18 2025


AKD Securities


  • AKD Fertilizer Universe’s profitability is projected to decline by 16%YoY in 1QCY25E, primarily due to lower offtakes.
  • Company-wise, FFC profitability is expected to rise by 46%YoY post-merger, while EFERT and FATIMA earnings are projected to decline by 65%/6%, respectively.
  • FFC payout is expected to increase by 63%YoY, while EFERT dividend is projected to fall by 75%YoY
Economy: Pakistan’s Trade Deficit Narrowed in March’25 - By Sherman Research

Apr 18 2025


Sherman Securities


  • A detailed breakdown of trade numbers released by the Pakistan Bureau of Statistics (PBS) shows that, on a monthly basis, imports remained flat at US$4.8bn during Mar’25. This stability was primarily driven by lower imports in the petroleum and food sectors on a weighted average basis, while agriculture imports increased.
  • On cumulative basis, import bill was recorded at US$42.7bn (up 9%YoY) during 9MFY25 mainly due to higher imports of machinery, textile and agriculture, while petroleum and food imports declined.
  • Exports increased to US$2.6bn (up 6%MoM) during Mar’24. Likewise, during 9MFY25, exports clocked in at US$24.7bn (up 8%YoY), mainly due to growth in exports in the food and textile sectors.
Pakistan Economy: Power sector circular debt resolution plan in the offing - By Foundation Research

Apr 18 2025


Foundation Securities


  • Pakistan's power sector has become a key challenge in the country's macroeconomic balancing act. Stabilizing the economy hinges on resolving power sector issues, which took center stage in recent IMF negotiations for the $7 billion Extended Fund Facility. In a bid to settle the amount in a single go, the government has plans to inject Rs1.5 trillion to tackle the circular debt crisis, clearing overdue liabilities and paving the way for sector stability.
  • Commercial banks will provide nearly Rs1.275 trillion of the bailout package, despite already having significant exposure to the power sector's circular debt. The deal, negotiated between the government and banks, offers below-KIBOR interest rates, potentially saving the government 3-5% on debt servicing costs. Contrary to news flow of banks being pressured into the deal, top banking executives and government officials have assured that the agreement was reached mutually.
  • According to news flow, a term sheet was signed between the government and banks at a large commercial bank in Karachi, with disbursements slated to begin next month. This financial intervention aims to curb the energy crisis and prevent further debt accumulation.
Economy: Mar-2025: Current Account posts historic surplus - By JS Research

Apr 18 2025


JS Global Capital


  • Pakistan's current account balance posted a massive surplus of US$1.19bn in Mar-2025, bringing the 9MFY25 current account surplus to US$1.86bn. The improvement was driven by record-high remittances, with Mar-2025 inflows reaching US$4.1bn, a 37% YoY surge.
  • Balance of Payments (BoP) remained negative this month as well due to loan repayments. Monthly BoP figure has turned negative for the fifth time FY25TD. However, BoP balance remains in positive territory for 9MFY25.
  • We highlight that some planned foreign inflows have not materialized, likely to be unlocked post IMF disbursement. SBP governor recently revised the Jun-2025 reserves forecast to US$14bn, up from previous estimate of US$13bn. To note, SBP’s reserves have declined by ~US$1.1bn since Dec-24 while Import cover is down from 2.8months to 2.1months.
Pakistan Textile: Mar’25 Textile exports up 10%YoY - By Taurus Research

Apr 18 2025


Taurus Securities


  • Textile exports arrived at USD 1.43Bn in Mar’25 as compared to USD 1.3Bn in the SPLY, reflecting a growth of ~10%YoY. Whereas, on a monthly basis it only increased by 1%MoM. The increase was mainly due to the higher exports of cotton yarn, knitwear, bed wear, ready-made garments, art & silk, made-up articles and other textiles up 30%YoY, 15%YoY, 19%YoY, 12%YoY, 9%YoY, 10%YoY and 11%YoY, respectively. Moreover, 9MFY25 textile exports increased 9%YoY to USD 13.6Bn as compared to USD 12Bn in the SPLY
  • In Mar’25, Basic textile exports totaled USD 205Mn, down ~2% YoY, mainly attributed to decline in exports of cotton cloth and yarn. Whereas, value added exports showed a significant increase of 13%YoY along with a 9%YoY increase in other textiles.
Morning News: March C/A posts $1.2bn surplus - By Vector Research

Apr 18 2025


Vector Securities


  • Pakistan’s current account posted a record all-time high monthly surplus of $1.2 billion in March 2025, fueled by historic inflows of home remittances, according to data released by the State Bank of Pakistan (SBP) on Thursday.
  • Foreign Direct Investment (FDI) into Pakistan rose by 14 percent during the first nine months of this fiscal year (FY25). According to the State Bank of Pakistan (SBP), the country fetched FDI amounting to $1.644 billion in July-March of FY25 compared to $1.442 billion in the same period of last fiscal year (FY24), showing an increase of $202 million. During the period under review, FDI inflows were $2.472 billion as against $828 million outflow.
  • Pakistan’s central bank’s foreign exchange reserves dropped by $127 million to $10.57 billion during the week ended April 11 due to external debt repayments, the State Bank of Pakistan (SBP) said on Thursday. The total liquid foreign reserves held by the country also decreased by $91 million to $15.66 billion. However, the reserves of commercial banks increased by $36 million to $5.09 billion.
Technical Outlook: KSE-100; Consolidation to continue - By JS Research

Apr 18 2025


JS Global Capital


  • The KSE-100 index witnessed positive movement to close at 116,901, up 881 points DoD. Volumes stood low at 408mn shares compared to 482mn shares traded in the previous session. The index is currently trading above the 30-DMA and the 50-DMA that will restrict downside at 115,828 and 114,617 levels, respectively. However, any upside will face resistance in the range of 117,210-118,050 levels where a break above targeting 118,718 level. The RSI and the Stochastic Oscillator have moved up, supporting a positive view. We recommend investors to ‘Buy on dips’, keeping stoploss below the 30-DMA. The support and resistance levels are at 116,074 and 117,472 levels, respectively.
Morning News: March C/A posts $1.2bn surplus - By WE Research

Apr 18 2025



  • Pakistan recorded a historic monthly current account surplus of $1.2 billion in March 2025, driven by unprecedented remittance inflows of $4.1 billion, according to the State Bank of Pakistan. This marked a 229% increase from March 2024 and a significant reversal from February 2025’s deficit. Cumulatively, the current account showed a $1.859 billion surplus in July–March FY25, compared to a $1.652 billion deficit in the same period last year. Analysts hailed this as a vital boost for the economy, easing pressure on the rupee, supporting foreign reserves, and reducing reliance on external borrowing. While the trade deficit widened to $18.73 billion due to increased imports, moderate export growth and a $2.32 billion services deficit highlighted ongoing challenges. Despite persistent financial pressures and IMF support under a $7 billion program, Pakistan’s external sector is showing signs of recovery backed by policy reforms and improved macroeconomic stability.
  • Foreign Direct Investment (FDI) in Pakistan rose by 14% in the first nine months of FY25, reaching $1.644 billion compared to $1.442 billion during the same period in FY24, primarily due to strong inflows from China and Hong Kong and increased investment in the financial services and power sectors. China contributed the largest share at 41%, with its FDI doubling to $684.5 million. Despite this overall growth, March 2025 saw a sharp month-on-month decline of 91% in FDI. Economists attribute the positive trend to improved macroeconomic stability and IMF-backed reforms, but warn that sustained growth depends on consistent policies and political stability to maintain investor confidence.
  • Pakistan’s textile exports grew by 9.38% during July–March FY25, reaching $13.613 billion compared to $12.445 billion in the same period last year, according to the Pakistan Bureau of Statistics (PBS). Overall exports rose by 7.82% to $24.719 billion, with March 2025 exports totaling $2.646 billion—up 6.27% from February and 3.08% year-on-year. Textile exports in March specifically increased by 9.97% from February. However, rice exports declined by 5.91%, totaling $2.757 billion compared to $2.930 billion last year. Key export commodities in March included knitwear, readymade garments, bedwear, various rice types, cotton cloth, towels, and petroleum products, highlighting continued strength in the textile sector despite weaknesses in agricultural exports.
Lotte Chemical Pakistan Limited (LOTCHEM): 1QCY25 EPS clocked in at PKR0.44 – Below expectation - By Insight Research

Apr 17 2025


Insight Securities


  • LOTCHEM has announced its 1QCY25 result, wherein company has posted PAT of PKR0.7bn (EPS: PKR0.44) vs. PAT of PKR0.9bn (EPS: PKR0.59) in SPLY. The result is below our expectation due to lower than estimated revenue.
  • In 1QCY25, revenue decreased by 33% YoY, due to lower volumetric sales. While on QoQ basis, same is up by 6% possibly due to higher PTA prices and volumetric sales.
  • Gross margins of the company clocked in at 6.2%, up by 100bps/540bps YoY/QoQ, due to improved core delta.
Economy: Pakistan’s Trade Deficit Narrowed in March’25 - By Sherman Research

Apr 18 2025


Sherman Securities


  • A detailed breakdown of trade numbers released by the Pakistan Bureau of Statistics (PBS) shows that, on a monthly basis, imports remained flat at US$4.8bn during Mar’25. This stability was primarily driven by lower imports in the petroleum and food sectors on a weighted average basis, while agriculture imports increased.
  • On cumulative basis, import bill was recorded at US$42.7bn (up 9%YoY) during 9MFY25 mainly due to higher imports of machinery, textile and agriculture, while petroleum and food imports declined.
  • Exports increased to US$2.6bn (up 6%MoM) during Mar’24. Likewise, during 9MFY25, exports clocked in at US$24.7bn (up 8%YoY), mainly due to growth in exports in the food and textile sectors.
United Bank Limited (UBL): Result Review: UBL 1QCY25 EPS Rs28.9, DPS Rs11 - By Sherman Research

Apr 16 2025


Sherman Securities


  • United Bank Limited (UBL) announced 1QCY25 results today wherein the bank posted unconsolidated net earnings of Rs35.6bn (EPS Rs28.9) compared to profit of Rs15.6bn, up 2.3xYoY.
  • Overall earnings remained higher than market expectations while the bank also announced interim dividend of Rs11 per share in 1QCY25 which is similar to last year.
  • Moreover, Board of Directors have recommended to sub-divide the shares from face value of Rs10/share to Rs5/share which is subject to shareholders approval.
Pak Elektron Limited (PAEL): Tariff Hike on China to Unlock US Transformer Market - By Sherman Research

Apr 11 2025


Sherman Securities


  • While accessing major implications of US tariffs on Pakistani manufacturers, we found out that PAEL seems to be one of the major beneficiaries of US-China Tariff war. Despite 29% Tariff imposition on Pakistani goods to US (currently paused for 90 days), higher tariff on Chinese goods (145%) may create additional demand for PAEL’s transformers as the company has already started exporting transformers to US from March 2025.
  • Our back of the envelope working suggest that for every 10% utilization of idle capacity, transformer business to generate additional annual earnings of Rs0.6/share (11% of CY25 earnings), provided we do not see dumping of goods by China.
  • PAEL is currently trading at CY25 PE of 7.8x versus last 3-year average PE of 9.6x. We have not yet incorporated the impact of US trade war with China on PAEL’s earnings.
Pak Elektron Limited (PAEL): Tariff Hike on China to Unlock US Transformer Market - By Sherman Research

Apr 11 2025


Sherman Securities


  • While accessing major implications of US tariffs on Pakistani manufacturers, we found out that PAEL seems to be one of the major beneficiaries of US-China Tariff war. Despite 29% Tariff imposition on Pakistani goods to US (currently paused for 90 days), higher tariff on Chinese goods (145%) may create additional demand for PAEL’s transformers as the company has already started exporting transformers to US from March 2025.
  • Our back of the envelope working suggest that for every 10% utilization of idle capacity, transformer business to generate additional annual earnings of Rs0.6/share (11% of CY25 earnings), provided we do not see dumping of goods by China.
  • PAEL is currently trading at CY25 PE of 7.8x versus last 3-year average PE of 9.6x. We have not yet incorporated the impact of US trade war with China on PAEL’s earnings.
Sazgar Engineering Works Limited (SAZEW): 3QFY25 EPS to Clock in at Rs90.7 - By Sherman Research

Apr 10 2025


Sherman Securities


  • We present 3QFY25 earnings estimate for Sazgar Engineering Works Limited (SAZEW) wherein company is expected to post net earnings of Rs5.4bn (EPS Rs90.7) as compared to net earnings of Rs3bn (EPS of Rs50.2), up 81%YoY. Furthermore, SAZEW is expected to announce a cash dividend of Rs20/share (up 2.5xYoY) in 3QFY25.
  • The growth in profitability is primarily driven by higher sales of Haval HEV SUVs coupled with higher sustained gross margins expected at 29.5% (supported by tax exemptions on HEV CKD imports).
  • On cumulative basis, net earnings are expected to reach Rs12.2bn (EPS Rs200) compared to net earnings of Rs4.4bn (EPS 73.6) up by 2.7xYoY during 9MFY25
Mughal Iron & Steel Industries Ltd. (MUGHAL): Conference Call Takeaways - By Sherman Research

Apr 8 2025


Sherman Securities


  • Mughal Iron & Steel Industries Ltd. (MUGHAL) conducted conference call today. The major area of focus remained the implications of reciprocal trade tariffs announced by US on international steel prices and the update on company’s upcoming hybrid captive power plant.
  • During1HFY25, company’s earnings declined by 83%YoY on the back decrease in gross margin and elevated finance cost.
  • Segment wise earnings show that non- ferrous business dragged overall earnings downward while ferrous business improved during 1HFY25 compared to same period last year.
Auto: Car Sales to decline by 9%MoM in March’25 - By Sherman Research

Apr 8 2025


Sherman Securities


  • The sales of leading car assemblers registered with PAMA are expected to decline, reaching 10,049 units in Mar’25 (down 9%MoM). However, on a quarterly basis, sales are projected to rise to 36,035 units in 3QFY25 (up 31% YoY).
  • We believe the monthly decline in sales is primarily due to the Ramzan effect and the entry of newly launched non-PAMA models in Mar’25 (BYD & JETOUR).
  • Interestingly Indus Motors (INDU) reported 3,131 units (up 20%MoM). This growth in sales is mainly due to higher sale of Yaris, Hilux models and Fortuner.
Fertilizer: Urea Sales Almost 5 Years Low - By Sherman Research

Apr 4 2025


Sherman Securities


  • According to provisional data, urea sales during Mar’25 is expected to clock in at 308k tons, down 54%YoY. Similarly, DAP sales to decline by 61%YoY. The YoY decline is mainly due to weak farm economics amid lower support prices and higher input costs.
  • Similarly, on MoM basis, urea sales is likely to decline by 11%MoM, mainly due to seasonal impact.
  • Urea sales of Fauji Group to clock in at 187k tons versus sales of 252k tons during the same period last year, down 26%YoY. Similarly, EFERT is likely to witness sharp decline in urea sales of 60%YoY to 59k tons as compared to 148k tons during the last year.
Economy: March CPI Clocked in at 0.7%YoY - By Sherman Research

Apr 3 2025


Sherman Securities


  • CPI for March’25 is recorded at 0.7%YoY compared to 1.5%YoY during the previous month thanks to decrease in food & housing index and base effect.
  • The food index reported disinflation (i.e. down 5.1%YoY) in March’25 which is highest decline since recent history. This decrease is primarily due to decline in prices of wheat flour (down 35%), wheat (down 35%), onions (down 71%), fresh vegetables (down 32%) and tomatoes (down 54%).
  • On a MoM basis, inflation increased by 0.9%MoM primarily driven by food index (up 1.9%MoM) and slight decline in housing index (down 0.1%MoM) mainly due to decline in electricity charges (down 1.3%MoM). The uptick in inflation was largely attributed to the Ramzan effect.
Ghandhara Automobiles Ltd (GAL): Upward Revision in Earnings, 3Q Preliminary Estimates - By Sherman Research

Mar 27 2025


Sherman Securities


  • Following our January 14, 2025, report, "Breaking Monopolies: GAL Introduces JAC T9 Hunter“, we are revising our earnings forecast upward by 34-62% for FY25-26 and raising our target price to Rs705 per share, driven by the T9 Hunter’s strong market response.
  • We maintain a “Buy” stance, as the stock is currently trading at an attractive FY26 P/E of 5.1x.
  • Our earlier assessment of the T9 Hunter (in pickup market) as a monopoly breaker has proven accurate as evidenced by its overwhelming market response. T9 Hunter’s appealing aesthetics and competitive pricing has driven exceptional demand, leading the company to pause bookings and increase price by 7.7% after just two weeks of launch. The strong demand appears sustainable, with current delivery timelines extending to Sep’25 coupled with lower-cost parts compared to competitors.