KSE-100 earnings rise 5.3% in 2025 on banking, auto gains

Profitability of companies listed on Pakistan’s benchmark stock index rose 5.3% year-on-year in 2025, driven by strong gains in banking, autos and cement, according to a report released by Arif Habib Limited.

The brokerage said earnings of companies representing about 83% of the KSE-100 index market capitalization climbed to PKR 1.558 trillion in 2025. The analysis covered 69 listed firms.

Arif Habib Limited said the earnings growth was led by a 50% increase in investment banking profits, followed by auto assemblers (up 44%), miscellaneous companies (36%), textile composites (31%) and cement (24%). Banks, oil and gas marketing companies, other sectors and food producers posted gains ranging between 3% and 10%.

However, refinery, real estate investment trust, power, chemicals and exploration and production sectors recorded year-on-year declines of 57%, 49%, 26%, 20% and 10%, respectively.

Sector-wise earnings

Despite a lower policy rate environment, the banking sector posted a 10% rise in profitability to PKR 640 billion, supported by expanding low-cost deposits, reversals in loan-loss provisions and stronger balance sheets, the report said.

The cement sector’s bottom line rose 24% to PKR 165 billion, helped by a 15% drop in coal prices and a 14% increase in dispatches, which boosted margins. Lower finance costs and higher other income further supported earnings.

In contrast, profits of oil and gas exploration companies fell 10% to PKR 331 billion due to lower global oil prices, reduced output amid production curtailments and weaker power demand. Higher operating and royalty expenses — notably at Mari Energies — and lower other income also weighed on performance.

The power sector’s net profit declined 26% to PKR 45 billion, mainly due to the termination of HUBC’s base plant power purchase agreement, provisioning related to Narowal Energy Limited, and the absence of one-off gains booked in 2024.

Auto assemblers saw profits surge 44% to PKR 88 billion, benefiting from a low base effect, recovery in sales volumes amid easing inflation, revival in auto financing and new model launches. Improved cash positions also boosted other income, although tractor sales remained weak due to flood disruptions and challenging farm economics.

The textile composite sector posted a 31% rise in profitability to PKR 13 billion, supported by lower domestic and imported cotton prices and declining finance costs.

Technology firms narrowed losses to PKR 2 billion from PKR 6.6 billion a year earlier, largely due to improved pricing by Pakistan Telecommunication Company Ltd. and reduced finance costs, the report said.

Quarterly earnings

On a quarterly basis, however, KSE-100 profitability fell 2% year-on-year to PKR 383 billion in the fourth quarter of 2025, as declines in REITs, oil marketing companies, chemicals and exploration firms offset gains in power, textiles, technology and autos.

Dividends paid by KSE-100 companies rose 23% year-on-year to PKR 808 billion in 2025, with the payout ratio reaching 52%.

Banking sector dividends climbed 35% to PKR 378 billion, led by major lenders including MCB, National Bank of Pakistan and United Bank Ltd., the report said.

Exploration and production companies increased payouts by 20% to PKR 146 billion, driven by higher distributions from Oil and Gas Development Company and continued semiannual dividends by Mari Energies.

Cement sector dividends rose 35% to PKR 35 billion, while power sector payouts increased 25% to PKR 26 billion, largely on the back of higher dividends from HUBC, Arif Habib Limited said.