Oil & Gas Marketing Companies: Higher growth ahead, Still a Buy - By Alpha - Akseer Research

Feb 7 2025


Alpha Capital


  • FY24 was a tumultuous year for Oil Marketing Companies (OMCs), characterized by demand destruction, elevated fuel prices, and a resurgence of smuggling activities from across the border, all of which hurt the OMC industry. However, the start of FY25 has been promising, and the outlook for the sector is positive as we witness a significant rebound in sales volumes. The past six months have been favorable for OMCs due to high volumetric sales, primarily driven by increased demand for Motor Spirit (MS) and High-Speed Diesel (HSD).
  • The growth in MS and HSD sales reflects a recovery in economic activity, particularly in the transportation and agricultural sectors, driven by falling commodity prices. We believe with the economic conditions stabilizing, further growth in MS and HSD sales volume is expected. Inflation has been steadily coming down, with the average inflation during CY24 recorded at 13.1%, compared to 30.9% last year. This is coupled with a projected GDP growth of 2.8% and a gradual recovery in large-scale manufacturing and service sectors, which will stimulate demand.
  • The government is expected to approve an increase in the OMC margins in Feb’25 following a recommendation by OGRA to increase margins from PKR 7.86/l to PKR 9.22/l. This is in line with the CPI-linked methodology of implementing margins and has been long overdue. An increase in margins will set the sector up for profitability.

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AirLink Communication Ltd ((AIRLINK): Innovation unplugged - By Foundation Research

May 27 2025


Foundation Securities


  • We initiate coverage on AirLink Communication Ltd. with an ‘Outperform’ rating and a Dec’25 TP of PKR 273.3/sh, implying a 67.8% upside. AIRLINK has established a strong position in the mobile manufacturing market through the local assembly of prominent brands including Xiaomi, Tecno, and Itel. The company has ambitious plans to expand its product portfolio further by venturing into the manufacturing of laptops, TV’s and EV’s.
  • Our positive outlook on AIRLINK is supported by (1) increasing broadband and smartphone penetration in Pakistan, (2) strategic expansion aided by a 10-year tax holiday, (3) rising market share of low budget smartphones, (4) diversification into laptops and TVs, (5) potential in Xiaomi smartphone exports, and (6) expanding horizons with EV’s. Despite growing competition, the company’s forward looking initiatives position it strongly to capitalize on untapped market opportunities.
  • Increasing broadband and smartphone penetration: Pakistan’s smartphone penetration (31%) is significantly lower than in neighboring India (47%) and other developing countries (avg: 54%) with a GDP per capita close to Pakistan’s. Similarly, smartphone penetration in South-East Asia stood at 79% in 2024, highlighting the gap and growth opportunity in Pakistan. Improved internet access and evolving popularity of social apps coupled with digitalization are likely to keep demand for smartphones robust in the near term.
Pakistan Economy: May-25 CPI likely at 2.7%, base effect wears off - By JS Research

May 27 2025


JS Global Capital


  • Pakistan's Consumer Price Index (CPI) is expected to clock in at 2.7% for May-2025. The base effect is now fading, signalling a return to normalized price trends. This is likely to take 11MFY25 average inflation to 4.7%, down from 11MFY24 average of 24.9%.
  • Due to the rapid disinflation during the year, our base case CPI forecast for FY25 averages 4.6%. The rolling 12-month forward CPI estimate stands at around 5.7%.
  • State Bank of Pakistan (SBP) reduced policy rate to 11% in the last MPC meeting, owing to rapidly declining inflation. A further rate cut of 50-100bps cannot be ruled out in the near future. SBP is scheduled next to meet on 16th June 2025 for its Monetary Policy Committee (MPC) meeting.
Morning News: IMF in disagreement over key targets, subsidies - By Vector Research

May 27 2025


Vector Securities


  • The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations.
  • Prime Minister Muhammad Shehbaz Sharif said that the bilateral trade between Pakistan and Iran which stood at $3billion would be taken to $10 billion volume in the next few years, as there was immense potential of growth. Prime Minister Shehbaz Sharif on Monday departed to Iran after concluding his two-day official visit to Turkiye.
  • Despite projected remittance inflows of $38 billion in the current fiscal year (FY25), Pakistan’s per expatriate remittance remains significantly lower than that of peer countries. “Although remittances have grown at a compound annual rate of 6.1 per cent from 2013 to 2023, per expatriate remittance remains low in comparison to other countries in the region,” said a report released by the Policy Research and Advisory Council (PRAC) on Monday.
Morning News: Budget features bold measures for ‘strategic direction - By HMFS Research

May 27 2025


HMFS Research


  • Finance Minister Muhammad Aurangzeb on Monday pledged that the upcoming federal budget would introduce “bold measures” to steer the national economy in a strategic direction and make available whatever support is required by the armed forces. Further said that every possible support would be provided to the armed forces, stressing that it was a national need in light of recent cross-border aggression, not just a military requirement. He said the government would ensure simplified tax returns and forms for the salaried class. He said that around 70 to 80 percent of salaried people did not hold equity and fixed-income portfolios. “They receive salaries through bank accounts with tax deducted at source. They should not have to fill in 140-150 data points,” he said, adding that the government aimed to reduce that number to just nine — five for wealth tax and four for income tax. He said the process would now be accelerated, with transactions involving Pakistan International Airlines (PIA), three power distribution companies and some financial institutions expected to reach completion by the end of this year.
  • The Finance Ministry said on Monday that the presentation of the Federal Budget 2025-26 has been delayed from June 2 to June 10 due to disagreements with the International Monetary Fund (IMF) over key budgetary figures, including subsidy allocations. “The budget announcement has been delayed by a week because the Finance Ministry’s figures are still under reconciliation. The IMF has placed a cap on subsidies,” he added. He further noted that the IMF has declined to make any changes to the revised budget figures recently presented to the Fund’s team.
  • The government is seriously considering reducing federal excise duty (FED) on beverages (aerated water) in the coming budget (2025-26) to attract foreign investment in this sector. Foreign investors including Turkish investors have promised more foreign direct investment in beverage sector in case of tax relief in the coming budget (2025-26). Leading global players with Turkish and Korean franchise investors have invested over USD 2 billion in Pakistan since 2018. However, no new investments have been made since 2023 due to the current fiscal environment. The industry contributes over Rs 175 billion in taxes annually (FED, GST, income tax, super tax) - one of the highest taxed sectors.
K-Electric (KEL): Transmission and Distribution Tariff Unveiled All three businesses now will get USD tariff - By Topline Research

May 26 2025


Topline Securities


  • In Seven months after securing dollarized tariff for generation business, the K-Electric (KEL) has also secured dollarized tariff for its transmission and distribution business for 7 years, i.e. from FY24 to FY30.
  • Distribution Business awarded USD ROE of 14%: NEPRA has awarded USD IRR of 14% to KEL for distribution business against requested USD IRR of 16.67%. The USD IRR of 14% translates into PKR ROE of 25.6% for Y1 (i.e. FY24). Which is better than previous tariff PKR return of 16.67%.
  • Transmission Business awarded USD ROE of 12%: NEPRA has awarded USD IRR of 12% to KEL for transmission business against requested USD IRR of 15%. The USD IRR of 12% translates into PKR ROE of 21.4% for Y1 (i.e. FY24). Which is better than previous tariff PKR return of 15%
Market Wrap: Highlights of the day May 26, 2025 - By JS Research

May 26 2025


JS Global Capital


  • The KSE-100 Index fell 0.8% to an intraday low of 118,150, as investor sentiment weakened due to the government's delay in presenting the federal budget and ongoing uncertainty surrounding IMF fiscal targets. The postponement of Budget 2025–26 and unresolved negotiations with the IMF are driving the risk-off behavior. Market direction remains contingent on clarity from upcoming IMF discussions and the budget announcement; volatility is likely to persist until fiscal policy details are finalized.
Pakistan Economy: OPEC’s aggressive output hike puts Pakistan in a sweet spot - By Insight Research

May 26 2025


Insight Securities


  • OPEC+ is expected to announce another output hike of 411 k bbl/day starting July, according to multiple news reports . During the group’s upcoming meeting on June 1st, members are likely to approve a production increase that is three times larger than the previously planned hike of 137 k bbl/day . If materialized, this move could add pressure to already struggling international crude oil prices, which have been weighed down by a weak global economic outlook.
  • Sources close to the group indicate that larger -than -expected output hike may be part of a broader strategy to bring as much as 2 . 2mn bbl/day back into the market by Nov’25 . The decision is widely seen as an effort, particularly by Saudi Arabia to regain lost market share and push high cost producers out of the market . Notably, Saudi Arabia’s market share has been on a declining trend since 2022 , following OPEC+ production cuts that reduced the cartel’s overall share in global oil supply . KSA’s market share declined even faster than the group’s average . The current strategy also appears to target non -compliant OPEC+ members, with Saudi Arabia leveraging its cost advantage to reclaim share from both shale producers and cartel members who are not adhering to quotas . Additionally, experts suggest a geopolitical angle to the move, particularly in the context of U . S . -Saudi relations . The Trump administration is reportedly keen on lower oil prices to curb inflation and restore market confidence especially due to tariff-induced uncertainty . On the other hand, Saudi Arabia is seeking deeper defense cooperation and has recently announced plans to invest US $600bn in US .
  • We believe that Saudi Arabia aims to capture market share from high -cost producers while maintaining some degree of control on prices through monthly OPEC+ meetings, as highlighted in group’s recent press releases . A sharp price decline would not be in KSA’s interest, especially considering its ambitious development plan .
Pakistan Economy: National Consumer Price Index (NCPI) - By AHCML Research

May 26 2025


Al Habib Capital Markets


  • Inflation in May’25 is expected to clock in at 3.0% YoY, up from 0.3% in Apr’25 and down from 11.8% in May’24, as base effects continue to fade. On a monthly basis, CPI is likely to decline by 0.6% MoM, posting the second consecutive drop, mainly due to a 2.3% fall in food prices amid improved supply of perishables. However, poultry shortages are expected to push egg and chicken prices up by 32.8% and 20.7% MoM, respectively.
  • The transport index is expected to decline by 0.7% MoM due to lower fuel prices, while the clothing and footwear index is projected to rise by 1.2% MoM.
  • On a YoY basis, food inflation is anticipated to ease to 0.9%, but non-food inflation is likely to remain elevated, led by healthcare (+12.5%), education (+10.4%), clothing (+9.9%), and restaurants (+8.4%).
K-Electric (KEL): NEPRA approves Multi-Year T&D Tariff for K-Electric - By Taurus Research

May 26 2025


Taurus Securities


  • NEPRA has approved Multi-Year Tariff for Transmission & Distribution (T&D) network segments of K-Electric for FY24- FY30. Salient features of the multi-year tariff approved by NEPRA are as follows:
  • Control Period: 7 Years, from FY24- FY30.
  • Allowed Debt-to-Equity Ratio: 70:30.
Pak Aluminium Beverage Cans Ltd (PABC): Exports outlook gets weaker; Reiterate Sell - By JS Research

May 26 2025


JS Global Capital


  • We tweak down our CY25E/CY26E EPS estimates for Pak Aluminium Beverage Cans Ltd (PABC) by 9% and TP by 4%. The revision is mainly led by the expected fall in volumes led by border issues with Afghanistan coupled with the upcoming capacity expansions in Central Asia, which may adversely impact PABC’s export prospects to the region. We reiterate our Underperform rating for the stock with a TP of Rs110.
  • Furthermore, any reduction in regulatory duty in the upcoming budget (from 22%-26% currently to 15% or less) given to the local industry, may create pressure on sales volumes from dumping of cheaper products in the country.
  • We consider resumption of dividend payout and announcement of any Capex or investment plan as key triggers for the stock going forward. To highlight, PABC stands at net cash position of Rs10.7bn (Mar-2025).
Morning News: WB announces USD 55m in additional funding - By Alpha - Akseer Research

May 23 2025


Alpha Capital


  • Federal Minister for Power Sardar Awais Ahmad Khan Leghari met with a delegation led by Anna Bjerde, Managing Director Operations of the World Bank, to discuss Pakistan's ongoing power sector reforms.
  • Pakistan is targeting the export of 125,000 tonnes of mangoes in the current season, with an anticipated revenue of $125 million, the Pakistan Fruit and Vegetable Exporters Association (PFVA) announced. The export campaign is set to kick off on Sunday (May 25).
  • Honda Atlas Cars Pakistan Limited (HCAR) reported a net profit of Rs2.7 billion (EPS: Rs18.97) for the year ended March 31, 2025, marking a 16 per cent year-on-year (YoY) increase and surpassing industry expectations.
Economy: MPC likely to cut policy rate by 50bps - By Alpha - Akseer Research

May 2 2025


Alpha Capital


  • We anticipate the State Bank of Pakistan (SBP) to reduce the policy rate by 50bps in the upcoming MPC meeting on May 5th, 2025. The revised policy rate would settle at 11.5%. Our expectation is primarily driven by favorable economic factors, namely i) an improvement in external account, ii) a decline in headline inflation, and iii) falling global commodity prices. The geopolitical situation still remains fluid, with rising tensions on the eastern border alongside US-China trade war. These factors may influence the SBP to take a cautious stance and defer the rate cut until more clarity emerges.
  • The headline inflation is expected to settle within the SBP’s 5–7% medium-term target range in the next 12 months. A combination of falling imported inflation amid trade war and declining local food prices, backed by improved supply conditions, has dimmed the inflation outlook. Core inflation (NFNE) is also expected to taper off after being sticky at 9% since Dec-24, reinforcing our stance of a 50bps cut in the upcoming MPC meeting.
  • Pakistan’s current account posted an impressive surplus of USD 1.2bn in Mar-25, taking the cumulative 9MFY25 surplus to USD 1.9bn. The improvement was mainly backed by all-time high remittances, which surged to USD 4.1bn in Mar25, extending a sturdy support for the external account.
Pakistan Petroleum Limited (PPL): 2QFY25 EPS clocks in at PKR 10.02, down by 32% YoY, DPS PKR 2.00 - By Alpha - Akseer Research

Feb 28 2025


Alpha Capital


  • PPL announced its 2QFY25 financial result today wherein, the company reported an EPS of PKR 10.02, down by 32% YoY. Along with the result, the company announced an interim cash dividend of PKR 2.00/share.
  • Net sales clocked in at PKR 61.3bn during 2QFY25, compared to PKR 73.0bn in SPLY, down 16% YoY, due to PKR appreciation against the greenback (5% YoY) and a decline in oil/gas production (-13%/-10% YoY).
  • The company posted exploration expenses of PKR 5.3bn (-20% YoY) for 2QFY25 vs PKR 6.7bn in SPLY, due to reduced exploration activity during the quarter.
Oil & Gas Development Company Ltd (OGDC): 2QFY25 EPS clocks in PKR 9.63, down by 44% YoY, DPS PKR 4.05 - By Alpha - Akseer Research

Feb 28 2025


Alpha Capital


  • OGDC announced its 2QFY25 financial result today wherein the company reported an EPS of PKR 9.63, down by 44% YoY. Along with the result, the company announced an interim cash dividend of PKR 4.05/share.
  • Net sales for 2QFY25 clock in at PKR 100.4bn, compared to PKR 115.2bn in SPLY, down 13% YoY mainly on the back of a lower oil prices (-10.2% YoY), and an appreciating exchange rate (+5% YoY).
  • Exploration expenses climbed to PKR 4.0bn (+68% YoY) for 2QFY25 vs PKR 2.4bn in SPLY, due to a dry well encountered at Kandewaro-1.
Oil & Gas Development Company Limited (OGDC): 2QFY25 EPS expected to clock in at PKR 9.03, down by 48% YoY, DPS PKR 3.00 - By Alpha - Akseer Research

Feb 25 2025


Alpha Capital


  • OGDC is expected to announce its 2QFY25 results, wherein we expect the company to report an EPS of PKR 9.03, down by 48% YoY. Along with the result, the company is expected to announce an interim cash dividend of PKR 3.00/share.
  • Net sales for 2QFY25 expected to clock in at PKR 102.1bn, compared to PKR 115.2bn in SPLY, down 11% YoY mainly on the back of lower oil prices (-11.5% YoY), and a PKR appreciation of 1.8% YoY against the greenback.
  • Exploration expenses are projected at PKR 6.1bn (2.6x YoY) for 2Q FY 25 compared to PKR 2.4bn in SPLY, due to a dry well encountered at Kandewaro-1.
Economy: Feb-25 NCPI expected at 1.8% YoY - By Alpha - Akseer Research

Feb 20 2025


Alpha Capital


  • The headline CPI is expected to arrive at 1.8% YoY in Feb-24, continuing the declining inflation trend, following a reading of 2.4% YoY in Jan-24. We expect average inflation of 5.2% YoY for FY25 with a run rate of 0.6% MoM. The base effect continues to contribute to the declining inflation trend, bringing the print down to the lowest in two decades. MoM inflation is expected to decrease by 0.6% MoM for the first time since May-24, primarily due to the Food segment (down by 2.4% MoM) and a negative Fuel Charge Adjustment (FCA), reducing the average electricity tarrif. The Transport segment is expected to exhibit an increasing trend (up by 1.1% MoM) owing to the rising POL prices.
  • The Food segment is expected to decline by 2.4% MoM in Feb-25. Items driving the reduction in prices include: tomatoes (-54.6% MoM), onions (-27.4% MoM) and potatoes (- 20.8% MoM). Additionally, wheat prices are expected to reduce by 2.3% MoM due to abolishment of wheat support price, as per the agreement with the IMF.
  • The Utilities segment is expected to stay flattish (up by 0.1% MoM) on the back of a negative FCA of PKR 1.23/kwh for Dec-24, which is expected to reduce average electricity tariff for consumers in Feb-24.
Oil & Gas Marketing Companies: Higher growth ahead, Still a Buy - By Alpha - Akseer Research

Feb 7 2025


Alpha Capital


  • FY24 was a tumultuous year for Oil Marketing Companies (OMCs), characterized by demand destruction, elevated fuel prices, and a resurgence of smuggling activities from across the border, all of which hurt the OMC industry. However, the start of FY25 has been promising, and the outlook for the sector is positive as we witness a significant rebound in sales volumes. The past six months have been favorable for OMCs due to high volumetric sales, primarily driven by increased demand for Motor Spirit (MS) and High-Speed Diesel (HSD).
  • The growth in MS and HSD sales reflects a recovery in economic activity, particularly in the transportation and agricultural sectors, driven by falling commodity prices. We believe with the economic conditions stabilizing, further growth in MS and HSD sales volume is expected. Inflation has been steadily coming down, with the average inflation during CY24 recorded at 13.1%, compared to 30.9% last year. This is coupled with a projected GDP growth of 2.8% and a gradual recovery in large-scale manufacturing and service sectors, which will stimulate demand.
  • The government is expected to approve an increase in the OMC margins in Feb’25 following a recommendation by OGRA to increase margins from PKR 7.86/l to PKR 9.22/l. This is in line with the CPI-linked methodology of implementing margins and has been long overdue. An increase in margins will set the sector up for profitability.
Morning News: Don’t take GSP+ for granted, says EU envoy: - By Alpha - Akseer Research

Jan 31 2025


Alpha Capital


  • The European Union has warned Pakistan not to take its GSP+ status for granted.
  • Minister for Finance Muhammad Aurangzeb said the legislation concerning the Agriculture Income Tax had been approved by the two provincial assemblies and the IMF was fully cognisant that progress was underway in Sindh and Balochistan.
  • The State Bank of Pakistan Governor, Jamil Ahmed, has said that exporters are being provided with all possible facilities to increase the country’s exports.
Economy: Revenue surplus expected to drop to PKR 4bn - By Alpha - Akseer Research

Jan 27 2025


Alpha Capital


  • As part of the IMF's conditions for the release of the USD 7bn tranche, Pakistan was required to terminate gas supplies to captive power producers (CPPs) by January 2025. This measure was intended to encourage a shift towards increased reliance on gridbased electricity consumption. However, following sustained efforts, the Economic Coordination Committee (ECC) succeeded in negotiating more favourable terms for CPPs.
  • Under the initial proposition, gas supply to the specified plants was to be discontinued by January 31st, 2025. However, the Government of Pakistan (GoP), while maintaining the gas supply for CPPs, has approved an increase in tariffs for CPPs, revising the rate from PKR 3,000/MMBTU (effective July 2024) to PKR 3,500/MMBTU (effective February 2025). All other categories, including domestic consumers, will remain unaffected by this tariff adjustment.
  • A total of 480 CPPs operate on the SNGPL network (54 MMCFD) and 800 on the SSGC network (118 MMCFD). With limited availability of capital, we anticipate minimal decline in demand in the short run. Additionally, the ECC has approved the imposition of a grid transition levy which penalises captive power, forcing the shift to grid power, thereby releasing the downward pressure on grid power consumption amid falling LSM index (-1.25% YoY) and transitions to solar power.
Economy: Dec-24 NCPI expected at 4.3% YoY, lowest since Apr-18 – By Alpha - Akseer Research

Dec 27 2024


Alpha Capital


  • The headline CPI is expected to arrive at 4.3% YoY in Dec-24, continuing the declining inflation trend, following a reading of 4.9% YoY in Nov-24. This is expected to take 1HFY25 average inflation to 7.3% YoY. MoM inflation is expected to remain flattish, up by 0.3% MoM, primarily on the back of (i) a muted trend in the Food segment, (ii) a -1.1% MoM decrease in utilities segment due to a reduction in electricity charges, and (iii) a 0.7% MoM increase in Transport segment due to a rise in POL prices.
  • The Food segment is expected to stay flat with a slight increase of 0.2% MoM in Dec-24, indicating winter effect on perishable food items. Within this category, items driving the reduction in prices include: wheat flour (-2% MoM), chicken (-13% MoM), and tomatoes (-14% MoM).
  • Electricity tariff for Dec-24 depicts the continuation of a downward trend due to (i) a negative FCA of PKR 1.145/kwh, (ii) an updated QTA of PKR 0.196/kwh, and (iii) the introduction of Winter Demand Initiative (WDI) offering a discount on incremental consumption to domestic consumers (using above 200 units). Cumulatively, we expect these developments to reduce electricity charges by 5.9% MoM in Dec-24 and, consequently, a 1.1% MoM fall in the Utilities segment in the NCPI print.