KSE-100 Profitability Rise 1.8% in FY25 to Rs. 1.7 Trillion

The combined profitability of companies in the KSE-100 index rose by 1.8% year over year to Rs. 1.66 trillion in fiscal year 2025, according to an analysis by Arif Habib Limited. The increase was supported by strong growth in investment banks, pharmaceuticals, cement, and auto assemblers, while energy, textiles, and chemicals weighed on overall performance. Commercial banks remained the single largest contributor, posting a 9% rise in profits to Rs. 592 billion on higher net interest income, capital gains, and lower provisioning. Fertilizer companies also added strength with a 7% increase to Rs. 138 billion, led by Fauji Fertilizer Company and the merger of Fauji Fertilizer Bin Qasim and FFC, alongside stronger margins and dividend income. The auto sector surged 39% to Rs. 65 billion as lower inflation, reduced interest rates, and revived consumer demand boosted sales, supported further by new model launches and higher volumes. Cement manufacturers recorded a 41% jump to Rs. 155 billion, aided by retention prices, improved power generation mix, and lower financing costs. Pharmaceutical firms outpaced all others with a 119% leap in profitability to Rs. 27 billion, supported by revised medicine pricing, regulatory approvals, and lower raw material costs. Conversely, profitability in energy and export-focused sectors declined sharply. Oil and gas exploration firms saw earnings fall 20% to Rs. 351 billion due to weaker international prices, lower production, and PKR appreciation against the US dollar. Oil marketing companies managed only a modest 3% rise to Rs. 71 billion as inventory losses and reduced ex-refinery prices offset some margin gains. Power producers faced a steep 40% drop to Rs. 49 billion, largely linked to the termination of Hub Power Company’s base plant agreement and adjustments tied to Narowal Energy and other plants. Textile composite companies saw profits plunge 55% to Rs. 8 billion amid high energy tariffs and increased taxation under export regimes. The chemicals sector recorded a 41% drop to Rs. 14 billion, pressured by weaker international margins and higher gas costs. Technology sector losses narrowed to Rs. 5.2 billion from Rs. 10.2 billion, with Pakistan Telecommunication Company Limited trimming losses and Systems Limited posting a 41% profit rise, cushioning the sector’s overall position. Arif Habib’s report covered 79 companies, representing 93% of the KSE-100’s market capitalization. While gains in banking, auto, cement, and pharmaceuticals drove the overall uptick, declines in energy and export industries underscored the uneven nature of corporate earnings in FY25.