Refinery: Recovery in GRMs, Bottom-Line to Turn Green in 2Q – By Sherman Research

Jan 17 2025


Sherman Securities


  • We expect fuel earnings of local refineries to rebound in 2QFY25 after remaining depressed during last 2 quarters. Our working suggest that average industry GRM is expected to remain around US$5.5 per barrel during 2QFY25, up 30% QoQ. However, company wise GRM may vary depending on product mix and crude grade. Having said that, GRMs are gradually improving on a monthly basis and now reached at US$8.5 per barrel during ongoing month.
  • We maintain our liking towards Attock Refinery Limited (ATRL) based on 1) high margin products contributing 73% of product mix and 2) ample cash of Rs750 per share which is providing buffer to volatile fuel earnings and creating room for high dividends in future. ATRL is also amongst our top alpha stocks for 2025.
  • Thanks to improving spread on diesel and FO, refineries are now yielding better Gross Refining Margin (GRM) on every crude they process. During ongoing month of January 2025, Industry GRM is close to US$8.5 per barrel. This is the highest GRM in last 10 months where as lowest GRM was recorded at US$1 per barrel during the month of June 2024.

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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.
Bank Alfalah (BAFL): 1Q2025 EPS at Rs4.49, up 65% QoQ (Earnings lower than industry expectations) - By Topline Reseach

Apr 17 2025


Topline Securities


  • Bank Alfalah (BAFL) announced its 1Q2025 result today, where the bank recorded consolidated earnings of Rs7.1bn (EPS of Rs4.49), down 29% YoY while up 53% QoQ.
  • Alongside the results, the bank also announced a first interim cash dividend of Rs2.5/share, which came in higher than expectations.
  • Net Interest Income (NII) for 1Q2025 settled at Rs33.6bn, up 6% YoY and 5% QoQ, driven by (1) higher asset yields and (
Bank Al-Falah Limited (BAFL): 1QCY25 EPS clocks-in at PKR 4.5; PAT down 29%YoY/up 52%QoQ - By Taurus Research

Apr 17 2025


Taurus Securities


  • 1QCY25 EPS: PKR 4.5. 1QCY25 PAT down 29%YoY. BAFL also announced an interim cash dividend of PKR 2.5/sh.
  • Net Interest Income (NII): Up 6%YoY/5%QoQ, despite pressure on yields, on the back of significant decrease in the cost of funds which can attributed to the build-up in current accounts during the quarter. To note BAFL’s CA ratio is up 4ppts QoQ with current accounts as of Mar’25 amounting to PKR 914Bn.
  • Non-Markup Income (NMI): Up 14%YoY/Down 21%QoQ. Sequential decline is owing to a surprising 16%QoQ fall in fee and commissions income, along with a 67%QoQ plunge in capital gains.
Pakistan Cement: 3QFY25E—Profitability to decrease by 21%QoQ - By Taurus Research

Apr 17 2025


Taurus Securities


  • We expect TSL cement universe PAT to clock-in at PKR 20.2Bn, down 21%QoQ on the back of drop in total dispatches by 13% QoQ (Net sales expected to fall by 10%QoQ in 3QFY25) i.e. domestic dispatches were down notably by 7%QoQ to 9.3Mn tons in 3QFY25 as construction demand plummeted due to winter effect and seasonality i.e. Ramadan and Eid Holidays. Further, Export dispatches dropped drastically by 35% to 1.7Mn tons in 3QFY25 owing to lower demand mainly.
  • TSL Cement universe gross margins are expected to arrive at 32%, down 2pptsQoQ due to drop in retail prices mainly in the North region (-6%QoQ) which put significant pressure on retention prices for North based players during the quarter. To note, capacity utilization in 3QFY25 fell to 51% compared to 58% during the previous quarter. Net income is expected to arrive at PKR 8.1Bn, down 9%QoQ.
  • During 3QFY25, we expect South based players to improve their margins on account of flat retail prices compared to the previous quarter along with lower international coal prices which has sustained higher retention prices during the quarter. To note, Richard Bay Coal prices averaged at USD 95.6/ton in 3QFY25, down 13% over the previous quarter.
The Pakistan Stock Exchange (PSX): Preconditions to takeoff – 2 - By Chase Research

Apr 17 2025



  • We revise our estimated fair value for Dec 2025 to PKR 41/share, reflecting stronger-than-expected value traded, a higher ADTV-to-market cap ratio, a reduction in the discount rate, and a rollover to December 2025. The stock offers a 45% upside from current levels. We maintain our Buy rating.
  • PSX operates as a unified national exchange, with over 500 listed companies across 38 sectors and a market capitalization exceeding PKR 14 trillion.
  • PSX owns 50% of NCCPL, which manages the clearing, settlement, and risk management functions of the stock market.
Power: Mar’25 generation up 5%YoY / 15%MoM - By Taurus Research

Apr 17 2025


Taurus Securities


  • Power generation in March 2025 clocked in at 8,409GWh, marking a 5%YoY increase and a 21%MoM recovery, driven by seasonal improvement in demand as the weather changes. This rebound follows the February slowdown, where generation had declined to 6,945GWh due to reduced industrial and household demand during winter.
  • For the 9MFY25, power generation dropped by 2%YoY, declining to 90,147GWh from 92,345GWh recorded in the SPLY.
  • Hydel generation declined sharply by 41%YoY and 31%MoM, contributing only 1,297GWh amid lower water availability. In contrast, coal-based generation surged 1.2xYoY to 1,938GWh and 68%MoM, likely due to better plant availability and reduction in global coal prices. Nuclear generation rose 7%YoY and 20%MoM, contributing the highest share at 2,223GWh. Elsewhere, generation from expensive sources like HSD and furnace oil dropped to 0%, aligning with the Government’s strategy to transition toward more cost-efficient and sustainable energy sources.
Technical Outlook: KSE-100; Moving averages to limit downside - By JS Research

Apr 17 2025


JS Global Capital


  • The KSE-100 index witnessed a volatile session to close at 116,020, down 755 points DoD. Volumes stood at 482mn shares compared to 479mn shares traded in the previous session. The index is moving towards the 30-DMA which is currently at 115,706 where a fall below targeting the 50-DMA at 114,542. However, any upside will find resistance in the range of 116,400-117,430 levels. The momentum indicators are mixed, signaling no clear trading view. We advise investors to ‘Buy on dips’, with risk defined below the 50-DMA. The support and resistance levels are at 115,390 and 117,037 levels, respectively.
Morning News: Roshan Digital Account inflows hit $235m in March, total crosses $10bn - By Vector Research

Apr 17 2025


Vector Securities


  • Total inflows into Roshan Digital Accounts (RDA) reached $235 million in March 2025, pushing cumulative inflows past the $10 billion mark, according to the latest data from the State Bank of Pakistan (SBP).
  • Terming Pakistan’s tax system highly ‘unfair and absurd’, the World Bank (WB) has called for bringing property into the tax net while ensuring it is accurately recorded and taxed. According to the WB, the increased burden on the salaried class could only be reduced by expanding the tax base and incorporating all incomes into the tax net.
  • Prime Minister Shehbaz Sharif Wednesday credited Beijing with Islamabad’s IMF programme saying it wouldn’t have been possible without the neighbouring country’s support. The premier’s remarks — made during a ceremony held in connection with the PM’s initiative for capacity building of 1,000 agriculture graduates in China — came in the context of last month’s deal between Islamabad and the IMF on the first review of the ongoing 37-month bailout programme of $7 billion.
Lotte Chemical Pakistan Limited (LOTCHEM): 1QCY25 Preview: Profitability to stay muted - By Insight Research

Apr 16 2025


Insight Securities


  • LOTCHEM is expected to post a PAT of PKR806mn (EPS: PKR0.50) in 1QCY25 vs. loss of PKR19mn (LPS: PKR0.01) in preceding quarter amid better core delta. While on YoY basis profitability inch up by ~2%. To note, International PTA prices plunged by ~13% YoY to clock in at ~US$682/ton. Similarly, PX prices witnessed a decrease of ~16% YoY to clock in at US$868/ ton, resulting in an increase of ~9% in PTA-PX spread. Company’s topline is expected to decrease by 25% YoY to clock in at PKR24.3bn in 1QCY25, amid lower volumetric sales. Whereas, same is expected to increase by ~20% QoQ due to higher volumetric sales. Gross margins of the company are estimated to clock in at 6.5% in 1QCY25, witnessing an increase of ~130bps/5.7ppts YoY/QoQ on account of improved core delta. Selling and distribution expense is expected to increase by 39%/20%, YoY/QoQ.
  • EPCL is expected to post a consolidated LAT of PKR264mn (LPS: PKR0.29) in 1QCY25 vs. LAT of PKR900mn (LPS: PKR0.99) in SPLY. Company’s topline is expected to increase by 12% YoY to clock in at PKR18.5bn in 1QCY25, amid higher volumetric sales. While, same is expected to decline by ~13% QoQ primarily due to lower PVC prices. Gross margins are estimated to clock in at 10.2% in 1QCY25 witnessing an increase of ~380bps YoY, attributable to higher volumetric sales. While on QoQ basis, same is expected to decline by ~390bps amid lower core delta and higher gas prices. To note, International PVC prices decline by ~4%/5% YoY/QoQ to clock in at ~US$756/ton. Similarly, PVCEthylene margins witnessed a decline of ~5%/10% YoY/QoQ. Selling and distribution expense is expected to decrease by 32% YoY, whereas same is expected to go down by ~8% QoQ. Financial charges are anticipated to decrease by 22%/27% YoY/ QoQ to clock in at PKR1.3bn, primarily due to decline in debt level and interest rates.
Economy: Rating upgrade: Fitch upgrades Pakistan’s rating to ‘B-’ from ‘CCC+’ - By Foundation Research

Apr 16 2025


Foundation Securities


  • Fitch has upgraded Pakistan’s long term Issuer Default Rating (IDR) to ‘B-’ from ‘CCC+’ and has termed the country’s outlook ‘stable’.
  • The ratings agency highlighted key metrics behind the upgrade which included the following:
  • Fitch expressed confidence in Pakistan’s progress on the fiscal front with reduced deficits and implementation of structural reforms. Further, the agency stressed upon tight economic policy that is expected to support build-up of forex reserves and limited external financing needs
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.
Economy: Pakistan’s Trade Deficit Held Steady in Feb’25 - By Sherman Research

Mar 19 2025


Sherman Securities


  • Detailed breakdown on trade numbers released by the Pakistan Bureau of Statistics (PBS) show imports declined to US$4.8bn (down 9%MoM), during Feb’25 compared to US$5.3bn in Jan’25. Historically, imports tend to remain lower in February. This decline was primarily driven by lower imports in the petroleum, machinery and agriculture sectors on weighted average basis, while food imports remained flat.
  • During 8MFY25, import bill was recorded at US$37.9bn (up, 8%YoY) mainly due to higher imports of machinery, and textile groups, while petroleum imports remained flat. Moreover, credit to private sectors has increased to Rs13trn (up 18%YoY and 17% since in June’24), wherein manufacturing loans are up 10%YoY and textile 14%YoY.
  • Similarly, exports also declined to US$2.5bn (down 16%MoM) during Feb’24. However, during 8MFY25, exports clocked in at US$22bn (up 8%YoY), largely supported by growth in exports in the food and textile sectors.