PAEL’s Revenue Surges 38% Amid Strong Demand in 2QCY24

Staff Report: Pak Electron Limited (PAEL) announced its 2QCY24 financial results, posting net earnings of Rs970 million (EPS of Rs1.12) compared to net earnings of Rs491 million (EPS of Re0.56) during the same period last year, reflecting a 98% year-on-year increase. The result aligns with our expectations.

During 2QCY24, PAEL’s topline reached Rs17.4 billion compared to Rs12.6 billion during the same period last year, an increase of 38% year-on-year. This robust growth is primarily due to a sharp increase in product prices in the Appliances division and a surge in contracts within the Power division.

PAEL’s gross margin remained stable at 27% during 2QCY24, consistent with the previous year. The stable margin is due to the company’s strategy of passing on cost pressures to the end consumer, thus maintaining its margins.

Operating expenses increased by 34% year-on-year, mainly due to higher inflationary pressures during the period.

On a sequential basis, earnings jumped sharply by 115% quarter-on-quarter, primarily due to a robust increase in volumetric sales driven by higher demand during the summer season.

Cumulatively, PAEL posted an EPS of Rs1.64 during 1HCY24 compared to Rs0.6 during the same period last year, an increase of 68% year-on-year. This sharp increase in earnings is mainly attributed to higher revenue (up by 45% year-on-year) and higher gross margins.