Companies on Pakistan's benchmark KSE-100 index post highest-ever profitability in FY24

The profitability of companies listed on Pakistan Stock Exchange's benchmark KSE-100 index registered year-on-year growth of 24% to reach PKR 1.6 trillion ($5.7 billion) during fiscal year 2023-24 (FY24).

This is the highest-ever profitability on a fiscal year basis.

According to a report issued by Arif Habib Limited (AHL), commercial banks posted 35% growth in profitability, reaching PKR 591bn, primarily due to higher net interest income.

The oil and gas exploration sector's profitability increased by 6% to PKR 440bn, aided by currency depreciation and a reversal of taxation on depletion allowance.

Fertilizer sector earnings surged by 84% to PKR 141bn, driven by a 59% increase in urea prices and sales of urea and DAP rising by 2% and 40%, respectively.

The cement sector's bottom line increased by 38% to PKR 115bn, benefiting from higher retention prices and lower coal prices, which offset the impact of increased energy tariffs and declining local dispatches.

However, the chemical sector's profitability dropped by 13% to PKR 37bn in FY24, mainly due to a one-off gain booked by Lucky Core Industries Limited (LCI) from the sale of NutriCo Morinaga and lower international chemical margins.

The power sector's net profit climbed 23% to PKR 93bn, with significant contributions from HUBC due to the addition of local coal-based plants, a higher share of profit from associates and joint ventures, and PKR depreciation.

Oil and gas marketing companies experienced a remarkable 137% increase in earnings, driven by higher ex-refinery prices and resulting inventory gains.

The auto assembler sector's bottom line surged 92% to PKR 25bn, thanks to better margins amid higher prices of passenger vehicles and tractors.

Conversely, the refinery sector saw a 14% decline in net profit to PKR 10bn in FY24 compared to FY23 due to lower Gross Refining Margins (GRMs).

The engineering (steel) sector's profitability decreased 22% to PKR 8bn, led by lower sales and margins from companies like MUGHAL and INIL.

This analysis is based on the KSE-100 index and includes the results of 87 companies, representing approximately 94.4% of the market capitalization of the benchmark bourse.