Cement, banks take PSX quarterly earnings to PKR 445B

Companies listed on Pakistan Stock Exchange’s KSE-100 index posted earnings of PKR 445 billion in the fourth quarter of the fiscal year 2025 (April-June), up 21% from PKR 366 billion year-on-year, because of significant growth recorded in the cement, pharma, and auto sectors and a rise in earnings of banks despite a cut in interest rate.

In US dollar terms, the profitability stood at USD 1.6 billion.

During FY25, benchmark index companies reported earnings of PKR 1.7 trillion, a 3% increase compared to the same period last year.

Excluding exploration and production (E&P) companies and banks, profits are up 13% on a year-on-year basis.

Despite the decline in interest rates, the banking sector’s earnings increased by 24% to PKR 160 billion during the fourth quarter of FY25. This growth was driven by an increase in net Interest income (NII) and non-markup income, supported by capital gains.

The E&P sector reported a 6% decline in profitability during 4QFY25, reaching PKR 83 billion.

The decline was mainly attributable to lower hydrocarbon output amid gas curtailment, with oil and gas production falling 15% and 10% YoY, respectively, during the quarter.

The impact was further compounded by weaker oil prices, which averaged USD 68.61/barrel in 4QFY25, compared to $87.36/barrel in the same period last year.

The cement sector’s profitability surged 79% to PKR 42.3 billion in 4QFY25, driven by higher cement export volumes, increased retention prices, falling coal prices, lower finance costs from monetary easing, and a more efficient fuel and power mix.

The automobile sector sustained its recovery in 4QFY25, with profitability increasing 2% year-over-year to PKR 17.8 billion, resulting in full fiscal year growth of 29% year-over-year.

The food and personal care sector’s profitability increased 11% during the fourth quarter of FY25 to PKR 15.2 billion, primarily due to a decline in inflation and interest rates.

The pharmaceutical sector witnessed a 72% increase in earnings during 4QFY25, reflecting the full-year impact of deregulation. Consequently, profitability for FY25 increased by 87% on a year-over-year basis.

On the other hand, the fertilizer sector recorded a 4% decline in earnings to PKR 36 billion during the quarter, due to higher selling costs associated with DAP. On a QoQ basis, however, earnings rose 8%, driven by seasonality and higher offtake.

Within other sectors, power, refinery, and chemicals reported earnings declines of 48%, 84%, and 86% year-over-year, respectively, during the fourth quarter of FY25.

In contrast, OMCs and textiles posted a 51% and 30% increase each during the fourth quarter of 2024-25, while the technology sector also showed improvement, with losses reducing to PKR 1.7 billion in 4QFY25, as compared to PKR 13.2 billion in 4QFY24.

On a sequential basis, the KSE-100 index earnings witnessed a 9% growth during the quarter, according to Topline Security research based on the analysis of 91 companies out of the total 100 companies that have announced their results. The report represents 97% of the KSE-100 market capitalization.

The brokerage house believes that adding the remaining companies of the index would not materially impact the profitability growth trend.