IT Exports Cross $2 Billion Mark in 7 Months of FY25

Pakistan recorded IT exports of US$ 2.18 billion in seven months of fiscal year 2024-25, up by 27 percent YoY compared to the same period last year, according to data released by the State Bank of Pakistan (SBP). According to Topline Securities, this is the 16th consecutive month of YoY IT export growth, starting from October 2023. Meanwhile, IT exports clocked in at US$ 313 million in January 2025, up by 18 percent YoY while down by 10 percent MoM. These monthly IT exports in January 2025 are higher than the last 12-month average of US$ 303 million. Export proceeds per day were recorded at US$ 13.6 million for January 2025 vs. US$ 16.6 million in December 2024. YoY jump in IT exports is due to Pakistani IT companies are active in engaging with global clients. Recently leading IT companies in Pakistan attended Oslo Innovation Week and Pak-US Tech Investment Conference. According to a Pakistan Software Houses Association (P@SHA) survey, 62 percent of IT companies are maintaining specialized foreign currency accounts. A major development in FY25 is that SBP has added a new category of Equity Investment Abroad (EIA), specifically for export-oriented IT companies. IT exporters can now acquire interest (shareholding) in entities abroad by utilizing up to 50 percent of proceeds from specialized foreign currency accounts. This development will further boost the confidence of IT exporters to remit proceeds back to Pakistan. Net IT Exports (Exports-Imports) displayed a monthly number of US$ 281 million which is an increase of 17 percent YoY and 27 percent MoM. These net IT export numbers in Jan-2025 are higher than the past 12-month average of US$ 261 million. According to Topline, the IT sector will continue its growth trajectory and momentum with likely growth of 10-15 percent for FY25 to US$ 3.5-3.7 billion. Under the ‘Uraan Pakistan’ national economic plan government has set a target of US$ 10 billion in IT exports by FY29. This implies a target CAGR of 28 percent till FY29. Within the IT sector, Systems Limited (SYS) is our preferred pick. SYS is currently trading at 2025F and 2026F PE of 15.0x and 11.2x, respectively.