Technical Outlook: KSE-100; Consolidation expected above key averages - By JS Research

Apr 9 2025

JS Global Capital

• The KSE-100 index showed positive momentum to close at 115,532, up 623 points DoD. Volumes stood at 531mn shares compared to 711mn shares traded in the last session. The index is currently trading above the 30-DMA and 50-DMA which will provide support at 115,328 and 114,243 levels, respectively. However, any upside will face resistance in the range of 115,920-116,700; a break above can target 118,718. The RSI has improved, while the MACD is heading down, supporting a neutral view. We recommend investors to remain cautious at higher levels and wait for dips. The support and resistance levels are at 115,165 and 116,296, respectively.

Morning News: Trillions of dollars in minerals can free Pakistan from IMF dependence: PM Shehbaz - By Vector Research

Apr 9 2025

Vector Securities

• Prime Minister Shehbaz Sharif has invited both local and foreign investors to capitalise on Pakistan's vast mineral resources, which are estimated to be worth trillions of dollars. Speaking at the two-day Pakistan Minerals Investment Forum 2025 (PMIF25) in Islamabad on Tuesday, the prime minister expressed optimism that utilising these resources would enable Pakistan to reduce its dependency on global financial institutions like the International Monetary Fund (IMF).

• Canadian mining giant Barrick Gold is set to raise $3 billion in international financing for the multi-billion-dollar Reko Diq Copper & Gold Project in Balochistan. Barrick’s President and CEO Mark Bristow told Dawn on Tuesday that a financing pact with the World Bank and its commercial arm International Finance Corporation (IFC) was expected to be signed by mid-year and final financing packages by third quarter this year for $650 million. “We expect to drawdown about $500m by 4th quarter,” he said.

• Prime Minister Shehbaz Sharif on Tuesday welcomed a $2 billion investment from global shipping giant AP Moller – Maersk, hailing it as a significant boost to Pakistan’s maritime sector. During a meeting with Robert Maersk, chairman of the board of directors at AP Moller – Maersk, he directed authorities to fast-track the conversion of memoranda of understanding (MoUs) signed with the company last year into formal agreements.

Mughal Iron & Steel Industries Limited (MUGHAL): Corporate analyst briefing takeaways - By JS Research

Apr 8 2025

JS Global Capital

• Mughal Iron & Steel Industries Limited (MUGHAL) conducted its corporate briefing today to discuss the current business dynamics and outlook. To recall, the company reported earnings of Rs217mn, down 83%YoY, translating into an EPS of Rs0.65 during 1HFY25. We present key highlights from the session.

• MUGHAL reported a topline of Rs47bn, up 2% YoY during 1HFY25 with stable volumes compared to last year. Despite the increase in revenue, gross margin declined by 2ppt YoY to 9%, due to lower retention prices and higher costs

• The management highlighted that current plant capacity utilization for melting and rolling stands at around 80% and 60–65%, respectively, post-Ramadan.

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.

Hoechst Pakistan Limited (HPL): FY24 Corporate Briefing Takeaways - By Taurus Research

Apr 8 2025

Taurus Securities

• HPL, formerly known as Sanofi-Aventis Pakistan Limited, has experienced a remarkable transformation since its acquisition by Packages Group. The Company has seen significant growth, reflected in its recent financial performance, including its highest-ever PAT. In FY24, HPL reported a revenue of ~PKR 26Bn, marking a 25%YoY increase from PKR 21Bn in FY23.

• The Company's margins improved by 6ppts, reaching 32%, driven by a favorable sales mix and a robust product portfolio. Notably, HPL achieved a PAT of ~PKR 1.8Bn, up 4.2xYoY from PKR 361Mn in the previous year. This impressive growth can be attributed to higher sales, enhanced gross margins, effective cost optimization, and a strategic pricing approach.

• HPL's sales mix is composed of 30% non-essential drugs and 70% essential medications. The revenue stream is generated from 54% imported medicines, primarily essential drugs, and 46% locally produced products. The Company’s portfolio features well-known medications, including Flagyl, Clexane, Haemaccel, and Selsun Blue.

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.

Meezan Bank Limited (MEBL): Strong Upside Potential – Buy - By AHCML Research

Apr 8 2025

Al Habib Capital Markets

• We initiate our coverage of Meezan Bank Ltd. (MEBL) with a Dec’25 Target Price (TP) of PKR 335, signifying a potential capital gain of 30.45%. The bank is also offering a healthy dividend yield of 9.76% (an expected dividend payout of PKR 25/share for CY25). The total return (capital gains + dividend) stands at an attractive 40.21%. MEBL is trading at a CY25 P/E ratio of 5.44x and a PBV of 1.62x.

• Meezan Bank's stellar growth in recent years can be attributed to several factors: 1) Remarkable deposit growth averaging 24% since 2020, driven by rising consumer preferences for Islamic banking; 2) Meezan stands as a major beneficiary of capturing the Islamic banking market share due to its first-mover advantage; 3) The growing consumer interest in Islamic banking and the SBP’s plan to transform Pakistan’s banking system to align with Shariah principles will further propel Meezan’s growth trajectory. Additionally, other highlights include the lowest infection ratio, consumer ease, and improved asset quality with a high coverage ratio.

• MEBL stands as Pakistan’s premier Islamic bank, delivering consistent growth, profitability, and resilience in an evolving financial landscape. Over the past five years, MEBL has demonstrated exceptional performance, with net interest income soaring from PKR 64.8bn in 2020 to PKR 287bn in 2024, driven by robust deposit growth and an expanding asset base. The bank’s efficiency has improved significantly, with its cost-to-income ratio declining to 26.78% in 2024, reflecting strong operational discipline. Net profit surged to PKR 102bn, while asset quality remains stable, supported by a prudent risk management framework.

Fertilizers: Urea sales to hit 5yr low in Mar-2025 - By JS Research

Apr 8 2025

JS Global Capital

• Fertilizer sales during Mar-2025 are expected to remain abysmal amid suboptimal farm economics. Accordingly, Urea offtake is likely to witness a decline of 54% YoY, arriving at 308k tons during the month. Cumulatively, Urea off-take during 1QCY25 is estimated to clock in at 1.1mn tons, down 40% YoY. Likewise, DAP sales are likely to drop by 61% YoY during the month.

• Company-wise, Fauji Fertilizer Company (FFC) is expected to post Urea off-take of 187k tons, down 26% YoY in Mar-2025. This includes 19k tons of granular Urea (ex. FFBL). EFERT’s Urea sales volume likely to arrive at 59k tons, down 60% YoY. Similarly, Urea off-take for FATIMA is likely to hover around 37k tons, down 53% YoY.

• Continued slowdown in Urea market is expected to keep inventory levels significantly high, arriving at 840k tons with EFERT being the most affected amid dull off-take, losing its market share by 6ppts YoY to 24% during 1QCY24. On the contrary, FFC continued to hold lesser inventory levels with market share increasing to 49% YoY (up 9ppts YoY)

Pakistan Cement: Sales dropped MoM in Mar’25 due to Ramadan, prices in recovery phase - By Foundation Research

Apr 8 2025

Foundation Securities

• Pakistan cement industry dispatches notched down by 9.4% YoY in Mar’25 to 3.57Mn tons (9MFY25: down 1.5% YoY to 33.99Mn tons). Domestic sales plummeted 11.3% YoY to 2.96Mn tons (9MFY25: -6.6% YoY), while exports exhibited an increase of 0.6% YoY to 0.61Mn tons in Mar’25 (9MFY25: +28.1% YoY).

• Local cement sales remained lackluster during Mar’25 MoM due to Ramadan effect and Eid-ul-fitr holidays. Exports shot up by 28.1% YoY in 9MFY25 as cement players continue to explore new export destinations given the prevailing weak local demand.

• On a YoY basis, domestic cement sales declined 11.3% during Mar’25 YoY on the back of (1) rise in royalty rates, (2) cement dealers strike pertaining to WHT and implementation of Point of Sale (POS) in Jul’24, (3) hike in cement prices (FED increased to PKR 4/kg in FY25 Budget), (4) elevated construction costs, and (5) high base effect given that this year Ramadan fell during the month of Mar’25 (ie. 10 days earlier).

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.