Dividend payouts in Pakistan surge to record PKR 848.9 billion in FY25

Corporate Pakistan delivered a record PKR 848.9 billion in cash dividends during the fiscal year 2024-25 (FY25), marking a 23% rise from FY24 and more than doubling the total disbursement from FY21, according to sector-wise data.

The top 25 dividend-paying firms alone accounted for PKR 644 billion of the total payout, with financial, energy, and fertilizer sectors dominating the charts.

Commercial banks remained the top contributors, disbursing PKR 311.6 billion in FY25, up 10.7% from the previous year and nearly threefold from FY21.

United Bank Ltd (UBL) and Meezan Bank Ltd posted record dividends of PKR 54.1 billion and PKR 50.2 billion, respectively, with Meezan Bank’s payout nearly tripling since FY23. The National Bank of Pakistan (NBP) resumed dividend payments, announcing PKR 17 billion after a two-year hiatus.

The oil & gas exploration sector followed closely with a 30% year-over-year increase, distributing PKR 125.7 billion. State-owned Oil & Gas Development Company Ltd (OGDCL) retained its position as the top dividend payer, disbursing PKR 60.4 billion — a 58.7% increase from FY24 — propelled by elevated global energy prices and operational efficiency.

Fertilizer companies also posted solid gains, with Fauji Fertilizer Company Ltd doubling its payout to PKR 52.5 billion. Engro Fertilizers Ltd, however, saw dividends fall to PKR 21 billion from PKR 33.4 billion, reportedly due to input cost pressures.

Pakistan Tobacco Company Ltd staged a remarkable recovery, delivering PKR 47.2 billion in dividends, a 478% increase from FY23, when payouts had slumped to PKR 5.2 billion.

Technology & communication nearly doubled its dividends since FY21 to PKR 4.67 billion, while power generation & distribution posted PKR 46.5 billion, a slight decline from prior levels. The chemical sector reported a sharp drop of 68% from its FY22 peak, with dividends shrinking to PKR 9.1 billion.

Textile composite and engineering sectors also witnessed declining payouts, reflecting broader industrial stress. Unilever Pakistan Foods Ltd rebounded to PKR 14.3 billion after skipping dividends in FY23, while The Hub Power Company Ltd reduced disbursements by 22.8% amid sector-specific challenges.

Equities outperform as KSE-100 index climbs 60%

Supported by aggressive monetary easing, tight fiscal discipline, and a strong external account, the KSE-100 index surged 60.1% in FY25 (57.1% in dollar terms), establishing itself as the top-performing asset class for the second year in a row. The bulk of returns came from capital appreciation.

Market enthusiasm was backed by record trading volumes, which climbed 43.6% year-over-year to 823 million shares, while value traded jumped 82.6% to PKR 38.1 billion.

Pharmaceuticals led the charge with a 99% annual return, followed by cement (93%), oil marketing companies (88%), and fertilizers (78%). Banks added 15,160 index points, fertilizers 8,292 points, exploration & production 6,845 points, and cement 5,596 points. The auto parts & accessories segment, meanwhile, contributed a negative 90 points.

Outlook favorable amid easing policy

Analysts at AKD Securities anticipate equities to remain in focus, with declining inflation and fixed income yields reinforcing their attractiveness. The benchmark KSE stocks are trading at a forward price-to-earnings (P/E) ratio of 5.6x, bolstering the case for further capital inflows.

Sectors positioned to benefit from monetary easing and energy-related structural reforms are expected to retain prominence in the coming quarters.