Pak Elektron 9M2025 Profit Up 64%

Earnings rise on stronger margins, lower finance costs; quarterly profit dips on seasonal slowdown.

Pak Elektron Limited (PSX: PAEL) reported a consolidated profit of Rs3.05 billion for the nine months ended September 30, 2025, translating into earnings per share (EPS) of Rs3.30, up 64% year-on-year, according to the company’s financial results released on Thursday. The growth was mainly driven by higher sales volumes in the appliances division during the first half of the year, improved gross margins, and lower borrowing costs.

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For the third quarter of 2025, PAEL posted a net profit of Rs681 million (EPS: Rs0.74), marking a 52% year-on-year increase but a 60% decline on a sequential basis, broadly in line with market expectations. The quarter-on-quarter drop was attributed to the seasonal slowdown following peak summer demand and flood-related disruptions that impacted sales operations.

Net sales for 3Q2025 stood at Rs11.3 billion, remaining largely unchanged on a yearly basis but down 46% from the previous quarter, reflecting the cyclical nature of appliance sales — particularly refrigerators and air conditioners — which see a surge during the summer months.

Gross margins in 3Q2025 improved to 27.5% compared with 25.9% a year earlier, supported by a stable exchange rate environment that reduced input cost volatility. For the nine-month period, gross margins averaged 27.2% against 26.5% in 9M2024. Distribution expenses rose 5% year-on-year to Rs815 million but declined 35% quarter-on-quarter due to lower sales volumes, while finance costs fell sharply by 38% YoY and 24% QoQ, providing a notable boost to net profitability.

The company’s effective tax rate in 3Q2025 stood at 39%, higher than 26% in the same quarter last year but lower than 47% in the preceding quarter. For 9M2025, the effective tax rate was recorded at 45% versus 43% in 9M2024.

Analysts noted that PAEL’s profitability benefited from operational discipline, improved pricing efficiency, and a decline in borrowing costs following monetary easing. At current levels, the stock trades at forward price-to-earnings multiples of 7.9x for 2025E and 7.0x for 2026F, suggesting moderate valuations relative to sector peers.

Market watchers expect PAEL’s appliance division to remain a key driver of earnings, supported by recovering consumer demand and a more stable macroeconomic backdrop, while continued cost optimization and lower interest expenses may further strengthen profitability into FY2026.