PSX index up 3.08%wow on earnings optimism
- Fertilisers, banks, E&Ps, and OMCs expected to lead PSX towards 165,215 points by year-end
Pakistan Stock Exchange (PSX) sustained its bullish momentum throughout the week on anticipation of strong earnings during the ongoing results season. The benchmark index touched its all-time high closing at 145,647 points on Thursday, but closed the week at 145,383 points, up 4,348 points, up 3.08%WoW, with meager decline in the last trading session.
Market participation improved with average daily traded volume increasing by 16.3%WoW to 653 million shares, up from 561 million shares a week ago.
Trade deficit for the month of July 2025 rose to US$2.8 billion, up 44%YoY.
Workers’ remittances for July 2025 also rose to US$3.2 billion, up 7%YoY.
Foreign exchange reserves held by State Bank of Pakistan (SBP) decreased by US$72 million to US$14.2 billion as of August 01, 2025.
Key sectoral developments included robust 30%YoY growth in cement dispatches for July 2025, while OMC offtakes reached 1.2 million tons, up 2% YoY.
On the international front, the Trump administration imposed an additional 25% tariff on India, raising reciprocal tariffs to 50%.
Other major news flow during the week included: 1) Pakistan gets 19% tariff after US drives a hard bargain, 2) SBP enhances housing finance limit for microfinance borrowers to PKR5 million, 3) ExxonMobil likely to come back for offshore venture, 4) Pakistan set to initiate dialogue with Qatar on LNG supplies, and 5) Budget deficit drops to 5.4% in FY25 from 6.8% for the same period last year.
Woollen, Jute, insurance, Tobacco, and Food & Personal Care were amongst the top performing sectors, while Synthetic & Rayon, Close-end Mutual Funds, Chemical, Sugar & Allied Industries, and Textile Weaving were amongst the laggards.
Major selling was recorded by Banks/ DFI with a net sell of US$18.8 million. On the other hand, Mutual Funds absorbed most of the selling with a net buy of US$22.9 million.
Top performing scrips the week were: AGL, NESTLE, UNITY, HBL, and BNWM, while the laggards included: GADT, PKGP, FABL, LCI, and IBFL.
According to AKD Securities, the market is expected to remain positive in the coming weeks, with further developments over circular debt expected to drive the market along with upcoming corporate results remaining in the limelight.
The benchmark index is anticipated to sustain its upward trajectory, with a target of 165,215 points by end December 2025, primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.
The top picks of the brokerage house include OGDC, PPL, PSO, FFC, ENGROH, MCB, FCCL, KOHC, INDU, and SYS.
Pakistan Oilfields (POL) reported 4QFY25 profit after tax of PKR7.4 billion (EPS: PKR26.17), up 12%QoQ but down 19%YoY. Earnings exceeded analysts’ estimate primarily due to a lower than expected effective tax rate, while PBT remained in line with expectations. This takes FY25 net profit to PKR24.2 billion (EPS: PKR85.19), down 38%YoY. The company announced a final cash dividend of PKR50/share, bringing total FY25 payout to PKR75/ share. Key highlights for 4QFY25result:
Net revenues was reported at PKR12.3 billion, down 16%QoQ and 18%YoY. The decline is attributable to substantial decrease in oil prices (International oil prices down 12%QoQ) coupled with decline in oil and gas production by 8% and 14%, respectively.
Operating expenses are down 58%QoQ and 59%YoY to PKR1.3 billion – higher than analysts’ estimate. Detailed financials are awaited for clarity.
Other income was recorded at PKR3.3 billion, down 31%YoY but up 16% QoQ. The annual decline was driven by a sharp reduction in policy rates.
POL booked an effective tax rate of 25% which has elevated its earnings.
POL’s stronger than expected profitability was primarily driven by a lower effective tax rate of 25%. Looking ahead, earnings are likely to taper as tax rates normalize.
Additionally, ongoing production curtailments due to pipeline bottlenecks are expected to keep output flat. Nevertheless, POL remains among the top dividend yield plays.
Attock Petroleum (APL) posted 4QFY25 profit after tax of PKR2.7 billion (EPS: PKR21.65), down 11%YoY but up 5%QoQ, broadly in line with market expectations. The YoY earnings decline was primarily driven by lower finance income due to falling interest rates.
On a sequential basis, profitability improved on the back of higher volumetric sales during the quarter. This took FY25 net profit to PKR10.4 billion (EPS: PKR83.53), reflecting a 25%YoY decline. Alongside the results, the company announced a cash dividend of PKR13/ share, taking the full-year payout to PKR25.5/ share. Key highlights for 4QFY25 result:
Net revenue was recorded at PKR127.4 billion, in line with market estimates. Improvement on a quarterly basis was mainly driven by higher volumetric sales which rose by 17%QoQ.
APL’s gross margins declined to 4.3% in 4Q, likely due to lower inventory gains, but remained above our 3.7% as expected.
The company reported net finance income of PKR1.1 billion, down 59%YoY and 6%QoQ. The decline in net finance income is attributable to on-going monetary easing.
The company booked effective tax rate of 41% as against analysts’ expectations of 39%.
APL delivered solid quarterly earnings, underpinned by robust growth in sales volumes. However, analysts expect earnings to ease slightly in the coming quarters as volumes could decline with the end of the Kharif harvesting season. Additionally, a higher petroleum levy may push retail prices further up, weighing on demand, while the recent drop in ex-refinery fuel prices could result in inventory losses.
Mari Energies (MARI) reported its 4QFY25 financial results, posting profit after tax of PKR18.8 billion (EPS: PkR15.7) during the final quarter, down 27%YoY. The result exceeded expectations, primarily due to lower effective taxes during the quarter. For the full year, company’s net profit amounted to PKR65.1 billion (EPS: PKR54.3), down 16%YoY. Alongside the result, company announced a final cash dividend of PKR21.7/ share, also down 16%YoY.
Company reported net sales of PkR44.8 billion during the quarter, up 12%YoY. This was due to higher estimated gas output of 863 mmcfd (up 4%YoY) as compared to the same period last year.
Notably, estimated production from Mari D&P increased to 798 mmcfd (up 4%YoY), while initiation of flows from the Shewa well by 45 mmcfd during the final quarter also contributed to the increase.
Elevated royalty charges of PKR10.5 billion during the final quarter, up 130%YoY, also contributed to the dampened bottom line. Notably, the royalty include additional 15% on the well-head value of the Mari D&P lease, effective from November24. This has resulted in a full-year effective royalty rate of 20% for FY25, as compared to 12.2% in FY24.