Food & Personal Care Products: Early signs of demand recovery – By JS Research
- We review food sector’s profitability for Sep-2025 quarter based on cumulative figures of 9 listed food companies. Our sample reported 9% YoY growth in topline along with 100bp expansion in margins. Notably this was the first quarter with positive revenue growth reported by Dairy segment (80-90% of NESTLE, FFL, FCEPL revenues) since GST imposition in Jul-2024.
- Recovery in sales, shift in product mix, cost optimization measures coupled with decline in finance cost enabled the companies to report 14% YoY growth in net earnings during the period.
- Our sample continued to underperform the benchmark KSE100 Index CYTD, as the sector’s market capitalization is up 19% compared to 42% gains reported by the index. NATF, UPFL and MUREB outperformed peers on the back of strong earnings and payouts, and subsidiary sell-off news flow in case of NATF. Resultantly, the sector P/S and P/E multiples now stand at 1.5x and 22x based on the trailing 4Q’s sales and earnings. NATF remains our top pick in the sector.