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Design pays the bills. PSX pays the attention. Public notes on Pakistani stocks: levels, earnings, errors.
Lahore
Joined September 2010
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SBP changed the savings deposit rule this week and it's a bigger deal than the headline makes it look.
Background first. For years banks were forced to pay a minimum profit rate on savings, the MDR, set at least 1.5% below the policy rate. It exists so a bank can't just take your money and pay you almost nothing for it. Fair rule.
But look at the size of what we're dealing with. Corporate and institutional deposits are more than half the entire banking system, roughly Rs14 trillion out of Rs27 trillion. A mountain of money that was sitting in banks earning a guaranteed floor.
Late 2024, SBP took that floor away for corporates. Now from August 1 they're going further, individuals holding more than Rs10m lose it too. Only the ordinary saver stays protected.
So what's the actual game here? Two things stacked together.
First, the banks. Remove the floor on that huge pile of big money and they can negotiate those rates down, an estimated 50 to 100 basis points off their cost of funds. That widens margins, and it helps the banks stuffed with corporate deposits the most, think Bank of Punjab.
Second, and this is the real one. SBP just launched InvestPak, where you can buy government securities directly. Take the guaranteed bank return away from big money and it has to go somewhere. T-bills and bonds are the obvious home. The state is herding large deposits out of the banks and into funding itself.
You and I aren't the target. Keep under 10m in savings and nothing changes for you. This whole thing is about where the big money sleeps, and the government has decided it wants that money working for the government.
Main toh August se dekhoonga banks kaise reprice karte hain.
Three of Pakistan’s five refineries signed upgrade agreements today...
#CNERGY #ATRL #NRL
For us filling our bikes or cars, this does not mean cheaper petrol tomorrow unfortunately
The intended benefit is cleaner fuel and less reliance on imported petrol and diesel... once the upgrades are funded and built
So this can be 'yar Aramco ka petrol dalwana hai' situaiton
The agreements move the policy forward
They are not the finished upgrades
Positive on execution... But a bare minimum as well
#KSE100 #PSX
Developing land and collecting maintenance fees doesn't make you a municipality... it makes you a real estate corporation, and corporate income tax applies to everyone
Court rules development and administrative functions alone do not make an institution a local authority, which must have powers to impose taxes and control municipal funds
Read: profit.pakistantoday.com.pk/…
Think of a neighborhood kiryana selling flour, oil, tea and snacks...
Rs5m in sales a year is about Rs417,000 a month
or Rs13,700 a day if it's open daily
roughly 27 or 28 grocery baskets at Rs500 each
Im assuming a lot here, but just stick with my for my point please
If the owner keeps Rs200,000 after costs for the year,
that's Rs16,700 a month,
a 4% margin
The Federal budget proposal would charge eligible retailers with
annual sales up to Rs200m
at 1% of sales
Rs50,000 here,
before withholding credits
It also requires at least Rs25,000 deposited with the return, but the summary doesn't explain how that minimum works with those credits...
That gross tax is a quarter of this example's annual profit...
What am I trying to say here? I support a simpler return... but the tax and deposit rules need to be clear enough that a small shop can know what it actually owes
colossalqureshi 🪐 retweeted
Just uploaded my deep dive on Lucky Core Industries (LCI).
FY26 earnings are under pressure, but LCI is much more than Soda Ash.
I break down Soda Ash, Pharma, Animal Health, Polyester, dividends, cash flow and valuation, and what could drive earnings over the next 5 years.
Scroll for the write-up.
youtu.be/UeCq51q7_fM?si=gv16…
National's masala sits in half the kitchens in this country
#NATF
FY26 sales Rs49.90bn,
up 11.9%
Profit after tax Rs5.65bn,
up 77.7%
EPS Rs24.26
from Rs13.65
Profit grew about six times faster than sales...
Net margin roughly 7.1% to 11.3% on my math
That is pricing and mix, and cheaper inputs
Positive on the margin jump
But cautious on demand until volume actually shows up, probabyl after the fuel situation settle down a bit
Final dividend Rs5
Petrol reaching Rs1,000 per litre...?
The petroleum minister warned us that it'' happen if shortage develops
Risk: availability first then price
Awais Leghari’s electricity announcement is another story
Large consumers could buy power directly from generators instead of relying on one buyer
First auction: 400MW planned over five years: 800MW
Good for competition... we're not cheaper bills any time soon though
August generation rose 5.1% but generation cost rose 37.6% to Rs10.01 per unit
DISCOs have requested about Rs1.73 per unit through the October FCA
One hits the bike or car the other hits the factory bill
Petrol is a shortage risk electricity is a reform opportunity...
Petroleum Minister Ali Pervaiz Malik has warned that petrol prices could reach Rs. 1,000 per litre if a shortage emerges in Pakistan.
He said there is currently no petrol shortage, while global oil prices have risen by 80%. Pakistan’s petrol prices, however, have increased by around 50%.
The minister also said the government is taking steps to avoid gas shortages during winter and has begun work on oil wells, with potential discoveries expected by October.
Disclaimer: This post is for informational purposes only and is based on publicly available reports. The image is AI generated and is just for reference.
#Pakistan #PetrolPrice #FuelPrices #OilPrices
colossalqureshi 🪐 retweeted
The Power Minister says suppliers and consumers can now deal directly with each other: no more government buying of electricity, and no more IPPs. That is not what has happened.
Today the government only issued papers for a 400 MW auction. Over five years, the plan is 800 MW. Pakistan’s usable power capacity is about 33,000 to 35,000 MW. So this is roughly 1% of the system now, and about 2% even after five years.
That is not the government leaving the electricity business.
The government still has to buy electricity from IPPs. The old contracts are still in force. The official rules of this new market say those old deals will not be changed. The government’s purchasing agency will keep paying them as before.
There are still around 100+ IPP contracts. Many have more than 20 years left. Some run into the 2050s. This same government also signed new deals in 2025.
The big capacity payments — money paid even when plants are not fully used — have not ended.
Ordinary people will still get electricity from the same companies, at rates set under the old system. This new auction is only for large users, mainly factories using more than 1 MW. Homes and small businesses are not part of it.
This is why the claim is misleading. The IPP problem was never just about missing paperwork for a market. It was a system where private plants were promised government purchase, and the public was made to pay whether the power was needed or not. That system is still there.
A 400 MW auction may help some big industrial buyers. It does not stop the government from buying from IPPs. It does not cancel the old contracts. And it does not take that cost off the public.
“No more buying by government, no more IPPs” would be true only when those contracts are actually ended. Until then, it is a slogan. The country is still paying for the old deals.
I am proud to announce that the RFP for 400 MW of wheeling has been issued today.
Decades old commitment of different governments has been practically implemented by PM Shahbaz Sharifs Team Power.
Suppliers and Consumers of Power can now transact with each other. No more buying of Power by government, No more IPPs.
This is real. It has happened
Alhamdolillah
colossalqureshi 🪐 retweeted
We need a serious rethink of P@SHA. It has become a one point agenda organization (No tax please!). Worse there is a group inside it whose entire business is the MoITT/ P@SHA ecosystem of events & trips. It has been going on for years. Everyone knows about it. No one talks about it.
Look at this CEC. 3 companies represented have less than 20 employees. Another 3 have between 39 to 69 employees.
One is a computer assembler + academy.
ADDO AI is fine because you need representation from the new tech stack. I guess so is the digital products company and the services company with export revenue. But these are companies that should be supporting actors, not main ones.
That leaves just Abacus. Large old school enterprise tech player & SI. Plenty of people.
There’s no large company here from high growth areas. This is not the bunch who will take you to $30 billion by 2030 which is the official target. There’s not a single person here who has closed a 100 million dollar B2B deal, or built an aggregator platform with millions of users.
Folks what are we doing. What are we doing? Why do we never have the courage to step up and say this is not working. Let’s take some tough decisions and reinvent. For the sake of the country. $30 billion will need all of us pulling in the same direction in an integrated manner. We’re not getting there with this P@SHA.
If you’re going to keep this as is then you need another bunch of heavy hitters in a new organization who pay themselves for a “bag the big elephants” approach. Who are ambitious and build a blueprint for a bunch of $100 million companies and a few billion dollar ones. Who engage not only with our government but also with governments of large markets.
What we have now is not gonna work.
The textile export number looks good...
$3.379bn in Jul-Aug FY27
up 5.55% from $3.202bn
But you don't buy textile exports...
You buy a shirt at Sapphire
That readymade garment's value rose 13.59%
quantity rose 10.92%
That implies average value per unit rose roughly 2.4%
Knitwear value rose 4.79%
quantity rose 9.24%
Average value per unit fell roughly 4.1%
That is a 6.5 percentage point divergence
We saw this chain break after the 2022 floods...
cotton shortages and energy costs hit textile production
More export dollars did not automatically mean cheaper clothes at home
So I’m positive on readymade demand,
cautious on knitwear
and neutral on #ILP #GATM and #NML until the margins increase in the data... These are good companies of course, but margins is where the stock will move
#GATM Chart below
Looking to find it near or below demand zone
#PSX #KSE100
I saw #PAEL sales up 19.1%...
1HCY26:
Sales Rs42.3bn, up 19.1%
Gross profit up 9%
Gross margin 24.75%, from 27%
Distribution cost up 33.2%
Operating profit down 7.9%
Net profit up 10.5% to Rs2.62bn
Demand is improving, exports and appliances helped
but fuel, distribution and payroll costs are taking the operating recovery
Lower finance costs are helping net profit too...
Positive on sales
cautious on earnings quality
Will try to grab it around demand zone or lower for a good swing
#KSE100 #PSX
Beyond the diplomatic rhetoric, stability in Saudi Arabia is essential for Pakistan's external account...
Disruption to Gulf stability risks the remittance inflows that keep the current account manageable
Early market closures are back on the table...
Markets at 9pm Restaurants at 11pm Government fuel quota cut by 50%
We have been seeing this cycle since 2008
The logic sounds really effective on paper: close commercial centers early, lower peak electricity demand, burn less furnace oil and imported gas
Does it actually deliver fuel savings?
In practice, consumer demand gets compressed rather than eliminated.
Shoppers crowd into smaller evening windows, worsening road traffic where idling engines burn more petrol...
Then families head home, shifting electricity consumption to residential air conditioning and backup power.
Commercial users pay the highest cross-subsidised tariffs.
When you shut them, distribution companies lose top-tier billing, but the base-load power plants still have to run.
The real fuel consumers in Pakistan are heavy freight, industrial transport and intercity logistics. Closing an electronics market at 9pm does not touch any of that...
Good for showing immediate government action. Much harder to find the actual data to prove this reall works in the positive...
Markets to close at 9pm, restaurants at 11pm; fuel allocation for government vehicles reduced by half.
dawn.com/news/2030636/govt-r…
Pakistan has 97% of registered vehicles uninsured...
Insurance penetration is only 0.7% of GDP
Voluntary pension accounts are just 143,000 against a working-age population of 134.4m
The opportunity is obvious...
but the opportunity is not earnings
Enforcement, digital distribution and claims settlement have to convert the gap into recurring premiums
#TPLI is the clearest listed read-through
My stance:
bullish on the structural opportunity
cautious on near-term earnings until premium growth comes through without claims and acquisition costs rising with it
I saw the 2.5x E&P earnings number... But you need to read why and how:
4QFY26 profit was Rs214bn
but Rs54.9bn came from a tax reversal
Remove that and profit was still roughly Rs159bn
about 86% above last year
But there are two more problems:
Sales rose 54% because average oil prices were 52% higher
Exploration costs rose 77% in Q4
Five dry wells were reported across OGDC and MARI
The company read-through is different:
#OGDC around 3x earnings
#PPL +93%
#MARI +99%
#POL +62%
Dividends were also meaningful:
#OGDC Rs17/share for FY26
#PPL Rs12
#MARI Rs27
#POL Rs100
My stance:
positive on distributions
cautious on recurring earnings
more bullish if production and collections hold when oil prices normalise
#KSE100 #PSX
#MTL is adding harvesters to a tractor business...
but the first benefit seems to be distribution revenue, not local manufacturing
MTL signed a distribution agreement with LOVOL for track-type harvesters, wheeled harvesters and balers
The announcement also says CKD assembly and local manufacturing could follow once market volumes reach a target
These are three separate and possible challenging steps:
import and distribute
sell enough units
justify local assembly
For Pakistan, better farm machinery can reduce post-harvest losses and improve productivity
For MTL, the stock case needs:
unit targets
selling prices
gross margin
farmer financing
working capital
and a timeline for CKD
The stock touched 318 this morning
with a reported trailing P/E of about 8.5x
So this is not a distressed valuation waiting for any good news
LOVOL has to become units and margin before it supports a higher multiple
Potentially positive for the product range
Neutral for earnings until volumes and margins show up
ONIC was supposed to be a digital brand using Ufone’s network...
PTA now says the structure looks more like an MVNO (Mobile Virtual Network Operator - is a wireless communications service provider that does not own the physical network infrastructure or radio spectrum it uses to sell cellular services to customers)
So PTML has been ordered to stop new ONIC sales, activations, SIM issuance, subscriptions and marketing
Existing users get three months to migrate
The interesting part is the commercial structure
DTMS reportedly receives 55% of relevant revenue during the first three years
PTA says PTML has two options:
Restructure ONIC as a normal PTML brand
Or obtain the required MVNO licence
Pakistan’s agriculture sector is close to one-fourth of GDP and employs around 37% of the labour force
But in FY2026:
Food exports were $5.02bn
Food imports were $9.15bn
We are producing food...
and still importing more food than we export
The problem is not only farm output
It is processing
Certification
Cold chain
Packaging
Branding
Working capital
The government is discussing an EXIM Bank export-finance pool rising from Rs1tn to Rs2tn by 2028
That could help
But more finance does not automatically create export value
#MFL is the clearest direct exposure... it processes and exports rice, rice glucose, rice protein and pink salt. Potentially good if export finance and logistics improve, but rice prices and freight decide the margin
#NATF exports reached Rs4.7bn in FY2025. Potentially positive if branded international sales keep growing faster than costs
#SHEZ reported international sales growth of 17%, with juices, ketchups and ready-to-eat products finding demand abroad. Potentially good, but scale and cash collection has been a problem
#MFFL has fruit and confectionery products, but I have not verified a material current export contribution. Neutral until export revenue and certifications show up
#FFL is a dairy and juice company, but the current evidence points more towards domestic demand than this export roadmap. Neutral to this specific thesis
#UPFL same as FFL, neutral for this policy
#UNITY is more exposed to edible-oil imports, local pricing and working capital than value-added food exports. Neutral to negative for this particular export story
The strongest names for the post are #MFL, #NATF and #SHEZ
Yes, Apple just hired a Pakistani to deal with their own government, because all the creative jobs were taken by Indians and Europeans 🤦🏼
