Sazgar Engineering Reports Highest-Ever Annual Profit

Sazgar Engineering Works Limited (SAZEW) announced the highest-ever net profit of Rs. 16.3 billion for the financial year 2024-25 (FY25) compared to Rs. 7.9 billion in the same period last year, up 106 percent year-on-year, with earnings per share (EPS) jumping to Rs. 270.22 from Rs. 131.12 in FY24. Net revenue climbed to Rs. 108.7 billion in FY25, reflecting an 89 percent increase year-on-year. The growth was driven by a 102 percent surge in Haval volumes to 10,832 units and a 2.8x jump in three-wheeler sales to 26,264 units, according to a report by Arif Habib Ltd. Operating profit before tax rose to Rs. 26.7 billion in FY25, up 122 percent YoY, while gross profit more than doubled to Rs. 31.6 billion. Sazgar’s return on equity stood at 122 percent compared to 97 percent a year earlier. For the fourth quarter (4QFY25), however, Sazgar’s earnings slipped to Rs. 3.55 billion (EPS Rs. 57.58), down 44 percent quarter-on-quarter, as gross margins fell to 25.1 percent from 32.6 percent in the same period last year. In 4QFY25, revenue rose 18 percent year-on-year to Rs. 27.3 billion, supported by Haval sales of 2,817 units (+28 percent YoY) and a 25 percent YoY increase in three-wheeler volumes to 6,258 units. Gross margins for 4QFY25 stood at 25.1 percent, compared to 29.1 percent in the same quarter last year and 32.6 percent in 3QFY25. Analysts attributed the quarterly decline to a sales mix shift toward lower-priced variants. Other income fell 33 percent YoY to Rs. 320 million in 4QFY25, largely due to lower interest rates during the period. The company announced a final cash dividend of Rs. 52 per share for FY25, compared to Rs. 24 per share in FY24, taking the full-year payout ratio to 19 percent. Distribution and admin expenses rose 64 percent and 48 percent, respectively, in FY25, while other income fell 7 percent. The effective tax rate for FY25 stood at 39 percent. Sazgar also announced plans to discontinue its Home Appliances business from September 1, 2025, to focus on its core and more profitable segments. The move, the company said, would not impact net sales or profitability. SAZEW is currently trading at a forward P/E ratio of 5.4x for FY26/27.