Pakistan stock market's profit drop 4.1% amid sector volatility

The Pakistan Stock Exchange’s benchmark KSE-100 index reported a 4.1% decline in profitability during the first nine months of fiscal year 2024-25 compared with the same period last year, with total earnings amounting to PKR 1.2 trillion, according to a report issued by Arif Habib Limited.

According to the figures — which represent 94% of the index's weightage — major sectors experienced earnings contractions, including oil and gas exploration, which fell 24% to PKR 265 billion due to lower international oil prices, reduced production and currency appreciation.

The fertilizer sector dropped 7% to PKR 88 billion amid declining urea and DAP sales.

Power sector earnings plunged 43% to PKR 35 billion following the termination of Hubco’s power purchase agreement and payable adjustments for several companies.

Oil and gas marketing companies saw a 9% decline to PKR 28 billion, while chemical sector profits fell 48% to PKR 11 billion due to weaker international margins and higher gas prices.

The textile composite sector suffered a 68% drop to PKR 5 billion, pressured by rising energy costs and increased taxes.

However, several sectors posted gains. Banking profits rose 5% to PKR 472 billion on higher net interest income and lower provisioning.

Cement earnings surged 31% to PKR 114 billion thanks to improved pricing and lower financing costs.

Auto assemblers recorded a 59% increase to PKR 34 billion as consumer demand strengthened amid lower inflation and interest rates.

Pharmaceutical profits jumped 171% to PKR 18 billion following drug price revisions and reduced raw material costs.

The food sector also grew 27%.

The technology sector rebounded with a profit of PKR 6.1 billion, reversing a PKR 21 billion loss from the previous year, driven by stronger performances from PTC and TRG.

Profitability in 3rd quarter

In the third quarter of fiscal year 2024-25, the KSE-100 index saw a 2.9% year-over-year earnings increase to PKR 397 billion, led by banking, cement, auto, pharmaceuticals, tobacco and food sectors.

However, oil and gas exploration, fertilizer, power, investment banking, chemicals and textiles continued to decline.

Dividend payout

Dividend payouts for KSE-100 companies rose 13% to PKR 471 billion, with a 40% payout ratio.

Banks increased dividends by 10% to PKR 227 billion, while oil and gas exploration firms raised payouts by 14% to PKR 64 billion.

Fertilizer sector dividends grew 41% to PKR 66 billion, cement payouts rose 21% to PKR 15 billion, and auto assemblers boosted dividends by 88% to PKR 20 billion.

Oil and gas marketing companies increased dividends by 25% to PKR 2 billion.

Analysts said the stock exchange’s performance reflects broader economic trends, including commodity price fluctuations, currency movements and shifting consumer demand, with sectoral disparities expected to continue in the near term.