Pakistan Economy: Pakistan recorded fiscal deficit of 1.2% of GDP in 1HFY25; In 1HFY25 primary surplus recorded at 2.9% of GDP - By Topline Research

Feb 10 2025


Topline Securities


  • Pakistan has recorded fiscal deficit of 2.8% of GDP (Rs3.4tn) during 2QFY25. This takes 1HFY25 fiscal deficit to 1.2% of GDP (Rs1.5trn). To recall that Pakistan recorded fiscal surplus of 1.5% of GDP (Rs1.9trn) in 1QFY25 mainly due to SBP profits of Rs2.5trn
  • Primary surplus was recorded at 0.3% of GDP (or Rs401bn) compared to surplus of 1.3% in 2QFY24 and surplus of 2.9% of GDP in 1HFY25 (Rs3.6trn).
  • The fiscal deficit of Rs3.4trn recorded in 2QFY25 is mainly due to increase in interest expense and higher transfer to provinces.

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Pakistan Economy: Feb’25 LSMI down 5.9%MoM/down 3.5%YoY - By Taurus Research

Apr 16 2025


Taurus Securities


  • Large Scale Manufacturing Index (LSMI) down 5.9%MoM in Feb’25, due to decline from key sectors i.e. Furniture (-56%), Machinery & Equipment (-34%) and Chemical Products (-19%). Whereas, top contributors were Other Transport Equipment (38%), Automobiles (31%), Coke & Petroleum Products (23%) and Tobacco (18%), respectively. 8MFY25 LSMI was down 1.9%YoY.
  • Textile production declined by ~0.33%YoY in Feb’25 attributable to decline in production of jute goods, woolen & worsted cloth and woolen blankets by 36.65%YoY, 3.66%YoY and 94.76%YoY, respectively— mainly due to the lower domestic and international demand driven by a seasonal shift that reduced the overall requirement of these products. Whereas, on a monthly basis it significantly declined by ~3.24%MoM, mainly due to the decline in production of jute goods, terry & towels, woolen & carpet yarn and woolen blankets by 19.56%MoM, 7.34%MoM, 4.42%MoM and 94.21%MoM, respectively
  • Automobile production down ~5%MoM in Feb’25. Wherein, Jeeps & cars production declined by 10%MoM. Similarly, LCVs production down ~13%MoM, respectively. On a YoY basis, production of LCVs, Jeeps & Cars, Trucks and Buses went up by ~23%, 26%, 1.8x and 48% on the back of controlled manufacturing costs, stable tariffs, eased import restrictions on CKD units and recovering demand due to improving macros.
Lotte Chemical Pakistan Limited (LOTCHEM): Earnings Hold Steady as PTA Margins Remain Underwhelming - By IIS Research

Apr 16 2025


Ismail Iqbal Securities


  • We expect LOTCHEM to report a PAT of PKR 779 million (EPS: PKR 0.51) for 1QCY25, compared to LPS 0.01 in last quarter. This improvement comes as operations normalize following a one-month plant turnaround last quarter. PTA sales volumes are also anticipated to recover to typical levels. However, PTAPX margins have averaged USD 100/ton this quarter, lower than the USD 122/ton in the past six years and the long term average of USD 110/ton, largely due to global dynamics and subdued international demand.
  • Additionally, this quarter is affected by the recent gas price hike. Where, the gas price for captive power plants has increased to Rs 3,500 per MMBtu, effective February 1, 2025. While this increase poses some pressure, it's worth noting that LOTCHEM’s cost structure and margins are largely driven by international PTA-PX spreads. Notably, in CY24, only around 7% of COGS was from oil, gas, and electricity expenses. Furthermore, the company is in the process of being acquired, as AsiaPak Investments Limited and Montage Oil DMCC entered into a share purchase agreement to acquire a 75.01% stake in LOTCHEM.
Bank Al-Falah Limited (BAFL): 1QCY25 EPS to clock-in at PKR 3.3; PAT down 47%YoY/up 13%QoQ - By Taurus Research

Apr 16 2025


Taurus Securities


  • Board Meeting: Thursday, April 17, 2025
  • 1QCY25 EPS: PKR 3.3. 1QCY25 PAT down 47%YoY. BAFL is also expected to announce a cash dividend of PKR 2.0/sh.
  • Net Interest Income (NII): We anticipate net interest income to post a drop of 9%YoY/11%QoQ mainly on account of falling yields on investments and re-pricing of the loan book; partially offset by a lower cost of funds due to the rate cut in Jan’25 and the impact of revised MDR regime coming into effect Jan’25 onwards
Commercial Bank: Banking Sector’s Dividends Payouts to Persist Despite Earnings Attrition in 1QCY25 - By Pearl Research

Apr 16 2025


Pearl Securities


  • We preview 1QCY25 earnings result for commercial banks within our coverage. We expect earnings of the Pearl banking universe to witness erosion of 3.6% QoQ due to NIM compression coupled with tapering off of growth in non-core income.
  • Notably, we expect the lagged impact of asset repricing and declining asset yields amid aggressive monetary easing measures to serve as a headwind for interest income, which nonetheless should partly be counteracted by volumetric balance sheet growth.
  • Additionally, we anticipate the offsetting decline in cost of deposit to remain relatively muted compared to the previous quarter despite strategic shift into low-cost deposits by the sector, thereby resulting in core income witnessing a contraction of ~6% QoQ, according to our estimates
Technical Outlook: KSE-100; Consolidation likely above key averages - By JS Research

Apr 16 2025


JS Global Capital


  • The KSE-100 index extended the gain to close at 116,776, up 385 points DoD. Volumes stood at 479mn shares compared to 485mn shares traded in the previous session. The index is expected to revisit yesterday’s high of 117,362 where a break above targeting 118,718 level. However, any downside will find support at the 30-DMA which is currently at 115,631. The RSI and the Stochastic Oscillator have moved up, supporting a positive view. We recommend investors to ‘Buy on dips’, with risk defined below the 30-DMA. The support and resistance levels are at 116,493 and 117,210 levels, respectively.
Engro Powergen Qadirpur Limited (EPQL): 1QCY25 EPS arrive at PKR 1.19, up 1.5xQoQ - By Taurus Research

Apr 15 2025


Taurus Securities


  • 1QCY25 EPS: PKR 1.19; DPS: PKR 7.5.
  • Revenue increased 9%QoQ to PKR 3.1Bn, attributed to improved dispatches amid seasonal demand recovery. However, YoY growth remained flat due to the impact of revised PPA terms, which converted the plant's structure to a 'take-and-pay' regime, limiting guaranteed capacity payments.
  • Finance income stood at PKR 26Mn versus PKR 238Mn in 1QCY24 (SPLY), reflecting the absence of late payment surcharge (LPS) which previously contributed significantly. The decline was anticipated after the company received PKR 8.04Bn in overdue receivables under the revised PPA settlements.
Commercial Banks: 1QCY25 Result Preview: Payouts to remain intact - By AKD Research

Apr 15 2025


AKD Securities


  • AKD Banking Universe is set to announce its 1QCY25E results, where we expect profitability to decline by 12%QoQ, as contraction in NIMs and a drop in nonmarkup income are expected to outweigh the impact of lower operating expenses and reduced taxation.
  • We anticipate our banking universe to maintain dividends in the first quarter, supported by resilient capitalization amid monetary easing, recovery in macro economic variables and removal of mandated ADR based taxation during the previous quarter.
  • Profitability to take a hit from declining yields: AKD Banking Universe is set to announce its 1QCY25E results, where we expect profitability to decline by 12%QoQ to PkR75.1bn, as contraction in NIMs and a drop in non-markup income are expected to outweigh the impact of lower operating expenses and reduced taxation.
United Bank Limited (UBL): 1QCY25 EPS to clock-in at PKR 18.4; PAT up 43%YoY/down 12%QoQ - By Taurus Research

Apr 15 2025


Taurus Securities


  • Board Meeting: Wednesday, April 16, 2025
  • 1QCY25 EPS: PKR 18.4. 1QCY25 PAT up 43%YoY. UBL is also expected to announce an interim cash dividend of PKR 12/sh.
  • Net Interest Income (NII): Expected to go up 2xYoY/9%QoQ, driven by robust growth in current accounts and a lower cost of funds as changes to the MDR regime go into effect, along with a drop in leverage on a sequential basis – offsetting the pressure on yields, specially on the Bank’s investment portfolio.
Technical Outlook: KSE-100: Closed above 30-DMA - By JS Research

Apr 15 2025


JS Global Capital


  • The KSE-100 index posted a gain of 1,537 points to close at 116,390. Volumes stood at 485mn shares compared to 459mn shares traded in the previous session. The index has closed above the 30-DMA which will now provide support at 115,535, followed by 114,357 (50-DMA). However, any upside will face resistance in the range of 116,500-117,300 where a break above targeting 118,718 level. The RSI and the Stochastic Oscillator have improved, supporting a positive view. We recommend investors to ‘Buy on dips’, keeping stoploss below the 30-DMA. The support and resistance levels are at 115,593 and 116,840 levels, respectively.
Morning News: IMF concludes Pak visit, set to propose transparency reforms - By Vector Research

Apr 15 2025


Vector Securities


  • The International Monetary Fund (IMF) has identified key shortcomings in Pakistan's governance, including the politicisation of the civil service, weak organisational accountability, and excessive focus on short-term goals. These issues, the IMF noted, contribute to broader governance weaknesses and increase vulnerability to corruption. The report which is expected to be made public by August this year will give recommendations for ensuring greater transparency and improving the public sector delivery by minimising the chances of corruption and through merit-based decisions.
  • With the halt of USAID operations by President Donald Trump, Pakistan’s total portfolio of $445 million has been affected over five years, surfacing a gap of $40 million for the current fiscal year for on-budget development projects. “However, in a positive development on the external front, Fitch Ratings might upgrade Pakistan’s rating within a few days”, top official sources confirmed while talking to The News on Monday. The Fitch might upgrade from a notch of CCC+ to BBB keeping in view the reduced risk of default.
  • Members of the delegation of US congressmen visiting Pakistan have described their trip to the South Asian country as "extremely productive" and “significant for the future", which is good news for the mineral-rich country. The delegation also attended the Pakistan Mineral Investment Forum 25 (PMIF25) last week in Islamabad.
Pakistan Cement: Cement profitability likely to increase by 40% YoY in 3QFY25 Led by lower finance costs and higher sales - By Topline Research

Apr 14 2025


Topline Securities


  • Topline Cement Universe is expected to post profitability of Rs16.0bn in 3QFY25 against profit of Rs11.4bn in 3QFY24, up by 40% YoY, mainly due to lower finance costs and higher sales.
  • Net sales are anticipated to increase by 10% YoY to Rs93.7bn in 3QFY25 mainly due to higher YoY domestic retention prices and higher YoY total dispatches.
  • Finance costs in 3QFY25 is likely to decrease by 44% YoY to Rs2.8bn due to lower interest rates
Systems Limited (SYS):2024 Annual Corporate Briefing Key Takeaways - By Topline Research

Apr 10 2025


Topline Securities


  • Systems Limited (SYS) held its corporate briefing today to discuss 2024 financial result and future outlook.
  • SYS EBITDA margins in 2024 decreased to ~15% in 2024 compared to 18% in 2023. Revenue growth in USD terms was 27% in 2024 compared to 2% growth in EBITDA. In 2024 Revenue in USD terms stood at US$242.35mn and EBITDA stood at US$35.94mn.
  • Appreciation of PKR had dealt a blow to margins of the company since the management had planned for PKR to depreciate by 5% in 2024. Going, forward management is now focused on optimizing its operations rather than be dependent on PKR depreciation
Pakistan Bank: Banks earnings to fall 19% YoY and 12% QoQ in 1Q2025 Market Weight Stance Maintained - By Topline Research

Apr 10 2025


Topline Securities


  • Topline Banking Universe is likely to post a 12% QoQ decline in earnings in 1Q2025, amid a fall in Net Interest Income (NII) and Non-Interest Income.
  • NII of the banks in the Universe is likely to decrease by 11% QoQ to Rs279bn due to (1) a decline in the average policy rate from 15.2% in 4Q2024 to 12.3% in 1Q2025, and (2) 10% QoQ decline in advances growth.
  • As per SBP’s weekly publication, advances of the banking sector declined by 10% QoQ from Rs15.6trn as of Dec 27, 2024, to Rs13.9trn as of Feb 28, 2025
Economy: Falling Commodity Prices amidst tariff war Impact on Pakistan Economy and Stock Market - By Topline Research

Apr 8 2025


Topline Securities


  • In the aftermath of tariff war, initiated by US and retaliated by other nations, the Bloomberg commodity index has declined 8% in last 3 sessions. Within this, crude oil prices (brent) and Richards Bay Coal Future (April) are down by 14.3% to US$64.2/bbl and 6.1% to US$88.5/ton.
  • The falling commodity prices shall impact on Pakistan’s macros including external accounts mainly current account, inflation, and fiscal accounts amongst others. We have run sensitivity analysis of decline in oil prices by US$10/barrel, this brings down oil related import bill (including RLNG) to the extent of US$2-2.1bn. In addition to oil, Pakistan can also save US$250- 300mn annually from coal, LPG and Palm oil, if lower levels of prices persists. Oil prices also affects inflation directly and with US$10/barrel decline in oil, the inflation will be directly impacted by 20bps, assuming benefit passed on to the consumers. Details are below;
  • Pakistan Imports 20mn tons of crude and refined oil annually: During FY24, Pakistan imported 9mn tons of crude and 10.3mn tons of refined oil (HSD, Petrol etc.), translating into total ~145mn barrels of equivalent oil. Every US$1/barrel decline in oil prices will reduce import bill by US$145-150mn and every US$10 per barrel will bring savings of US$1.5bn on petroleum oil front.
Insurance: Listed Non-Life Insurance profits up 35% in 2024 to Rs17.4bn - By Topline Research

Apr 7 2025


Topline Securities


  • Pakistan's listed Non-Life (General) Insurance companies reported profits of Rs17.4bn in 2024 which is up by 35% YoY compared to 2023 and better than last 5-year CAGR of 19%.
  • Higher profits are led by better underwriting results, and higher Investment Income.
  • In 2024 Net Premiums increased by 25% YoY to reach Rs68.6bn compared to 2023. Net premiums have increased due to growth in all major segments including Fire & Property, Motor, Marine.
Fertilizer: Pakistan’s Urea sales for Mar-2025 is expected to clock in at 308K tons, down 54% YoY - By Topline Research

Apr 4 2025


Topline Securities


  • Pakistan Urea sales in Mar-2025 is expected to clock in at 308k tons, down 54% YoY compared to 671k tons in Mar-2024.
  • Similarly, Urea sales is expected to decline by 11% MoM. This will take 1Q2025 offtake to 1.1mn tons, down 40% YoY compared to 1.8mn tons in 1Q2024.
  • This is likely to take closing inventory of Urea to be around 837k tons in Mar-2025, up from 536k tons in Feb-2025.
Economy: Reciprocal Tariffs of US Impact on Pakistan and Listed Cos - By Topline Research

Apr 3 2025


Topline Securities


  • The United States of America (USA) has imposed reciprocal tariffs on its trading partners including Pakistan, aiming to boost domestic manufacturing by making foreign imports expensive and to raise revenue.
  • The reciprocal duties ranges from 10-48%, which reportedly is in addition to universal tariff of 10% on all countries.
  • The reciprocal duties are imposed with the exception of Mexico and Canada as these countries were subject to previously announced tariffs of 10-25%. While certain goods from key industries i.e. steel, aluminum, automobiles, copper, pharmaceuticals, semiconductors, and lumber - are also exempt from these rates.
Pharmaceuticals: Pakistan Listed Pharma Sector Analysis 2024 Deregulation improved sales and margins - By Topline Research

Mar 27 2025


Topline Securities


  • Pakistan listed pharmaceuticals sector’s earnings were up 3.1x to Rs24.8bn in calendar year 2024. This jump in profitability is primarily attributed to higher net sales and improved gross margins.
  • Net sales increased by 15% YoY to Rs318bn in 2024, primarily driven by a increase in drug prices.
  • To recall, in Feb-2024 the government approved the deregulation of non-essential drug prices, which allowed companies to increase prices without any cap as it was under previous drug policy to increase the prices of all other non-essential drugs by up to the full increase in CPI (with a cap of 10%). While prices of essential drugs are still capped with formula of up to 70% of the increase in CPI (with cap of 7%).
Oil and Gas Exploration: OGDC and PPL completes feasibility study of the Reko Diq project - By Topline Research

Mar 26 2025


Topline Securities


  • Oil and Gas Development Company (OGDC), and Pakistan Petroleum (PPL) announced completion of the feasibility study of the Reko Diq project.
  • To recall, State-Owned Enterprises (SOEs), including OGDC, PPL, and Government Holdings Private (GHPL), collectively hold a 25% stake in the Reko Diq Project through a Special Purpose Vehicle (SPV), with each company holding an equal stake of 8.33%.
  • As per the feasibility study, Reko Diq has a lifespan of 37 years, divided into 2 phases
Cement: Royalty increase proposed on KPK based cement manufacturers in line with Punjab - By Topline Research

Mar 24 2025


Topline Securities


  • In a major development, royalty on cement for KPK province is considered to be shifted from ore-based to bag-based calculation with a minimum of 6% of ex-factory sale value as prevalent in Punjab province.
  • To recall that previously royalty on limestone and argillaceous clay used for cement manufacturing was fixed at Rs250/ton for plants based in KPK.
  • This would have a negative impact on profits of KPK based manufacturers since the royalty on raw material which currently stands at Rs250/ton will increase incrementally by Rs1,100-1,200/ton based on current ex-factory prices, which is prevalent for Punjab based plants.