KSE-100 Earnings Jump 21% in 4QFY25 to Rs445bn

Banking, cement, and pharma sectors drive quarterly growth; dividends rise 7% YoY

KSE-100 index companies posted earnings of Rs445bn in 4QFY25, up 21% YoY from Rs366bn in 4QFY24. In US dollar terms, profitability stood at US$1.6bn. During FY25, benchmark index companies posted earnings of Rs1.7trn, up 3% YoY. Excluding E&Ps and banks, profits are are up by 13% YoY.PSX, Stock Market, Rollover Week, Investor Sentiment

Despite the decline in interest rates, the banking sector’s earnings increased by 24% YoY to Rs160bn in 4QFY25. This growth was driven by an increase in Net Interest Income (NII) and non-markup income, supported by capital gains.

The E&P sector posted a 6% YoY decline in profitability during 4QFY25 to Rs83bn. 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 US$68.61/barrel in 4QFY25 (compared to US$87.36/barrel in 4QFY24).

Cement sector profitability surged 79% YoY to Rs42.3bn 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 up 2% YoY to Rs17.8bn, taking FY25 growth to 29% YoY. Despite a 57% YoY increase in passenger car sales during the quarter, profitability growth remained modest due to a decline in tractor sales.

Food and personal care sector’s profitability increased 11% YoY during the quarter to Rs15.2bn, primarily due to a decline in inflation and interest rates.

The pharmaceutical sector witnessed a sharp increase of 72% YoY in its earnings during 4QFY25, reflecting the full-year impact of deregulation. Consequently, profitability for FY25 rose 87% YoY.

On the other hand, the fertilizer sector recorded a 4% YoY decline in earnings to Rs36bn during the quarter, on account of 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% YoY, respectively during 4QFY25. In contrast, OMCs and Textiles posted a 51% and 30% YoY increase each, while the Technology sector also showed improvement, with losses reducing to RsRs1.7bn in 4QFY25 vs Rs13.2bn in 4QFY24.

“On a sequential basis, KSE-100 index earnings witnessed a growth of 9% QoQ,” Topline said.

§  For our analysis, we have taken 91 companies out of the total 100 companies (that have announced their results), which represents 97% of KSE-100 market capitalization. We believe that adding the remaining companies of  the index would not materially impact profitability growth trend.

§  KSE-100 index companies announced cash dividends of Rs272bn in 4QFY25, up 7% YoY compared to Rs254bn in 4QFY24.

§  This translates into a 61% dividend payout in 4QFY25 vs. 69% in the same period last year.

§  On a QoQ basis, dividends were up 142%, in line with the year-end pattern where companies typically declare payouts.

§  This takes the FY25 dividends to Rs775bn, up 13% with a payout ratio of 45%.

§  The banking sector remained the largest contributor with dividend announced of Rs87bn in 4QFY25 followed by E&Ps (Rs69bn), and Fertilizers (Rs30bn).

§  Banks: United Bank Limited (UBL), Standard Chartered Bank (SCBPL), and Meezan Bank (MEBL) were the top contributors in this sector, with payouts of Rs20.0bn, Rs13.5bn, and Rs12.5bn, respectively.

§  E&Ps: Within the E&P sector, Mari Energies (MARI) announced the highest dividend at Rs26bn, followed by Oil & Gas Development Company (OGDC) with Rs21.5bn, Pakistan Oil Fields (POL) with Rs14bn and Pakistan Petroleum (PPL) with Rs6.8bn.

§  Fertilizer: In the fertilizer space, Fauji Fertilizer (FFC) announced the largest payout of Rs17bn, while Fatima Fertilizer (FATIMA) declared Rs7bn and Engro Fertilizers (EFERT) announced Rs7.4bn.

§  Automobile: Indus Motor (INDU) led the sector with Rs3.9bn in dividends, followed by Millat Tractors (MTL) at Rs2.9bn, and Sazgar (SAZEW) at Rs1.2bn.

§  Food & Personal Care: Nestle Pakistan (NESTLE) emerged as the largest contributor of Rs10.1bn, while Unilever (UPFL) and National Foods (NATF) declared dividends of Rs2.8bn and Rs1.1bn, respectively.

§  Cement: Bestway Cement (BWCL) announced dividends of Rs5.9bn, followed by Fauji Cement (FCCL) at Rs3.1bn and Lucky Cement (LUCK) at Rs1.2bn.

§  Power: Within the sector, Hub Power Company (HUBCO) declared the highest dividend of Rs12.9bn during the quarter.

§  Pharmaceuticals: Unlike the usual nil payout in the June quarter, the sector announced Rs3.3bn in dividends, with GlaxoSmithKline (GLAXO), Haleon Pakistan (HALEON) and AGP Ltd. (AGP) paying Rs1.5bn, Rs1.2bn and Rs.560mn respectively..