21 29
Profit
10 Bookme takes big leap with $20mn revenue target and acquisition talks at over $100mn price tag underway
14 What’s all the fuss about Green Financing?
16 Could the Saudi-Pak Defence Pact force Modi and Islamabad to play nice?
21 Millat Tractors’ revenues tank over 43% in annus horribilis for Pakistani farmers
23 Declining production hits PPL’s bottom line
25 Despite stiffer competition, Toyota Pakistan closes best ever year in 2025
24 Bank of Punjab has been stable for a while. It took interim dividends for the market to notice.
29 Murree Brewery crosses $100 million in revenue for the first time
32 Do Pakistani business groups know how to diversify? Asif Saad
34 Will Bunny’s rise?
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Bookme
takes big leap with $20mn revenue target and acquisition talks at over $100mn price tag underway
The Pakistani ticketing startup was launched in 2014. More than a decade later it is looking to expand beyond Pakistan and has found potential markets
By Mah Rukh Bodla and Taimoor Hassan
When you open Bookme’s website today, the most obvious change that you will notice is in its brand identity: what was once Bookme.pk is now Bookme. This rebranding reflects a shift in outlook. The company, which began as a domestic ticketing platform, is positioning itself for recognition in multiple markets rather than being seen only as a Pakistani service.
Over the course of a decade, Bookme grew from a small startup to Pakistan’s most widely used digital ticketing platform. Its app and website cater to millions of users, offering everything from bus reservations and cinema tickets to flight bookings and event passes. For many urban Pakistanis, especially young travelers, students, and families on the move, Bookme became the quiet solution to an everyday problem of saving time. Today, the company’s ambitions stretch far beyond bus terminals and box offices. In fact, Bookme is now actively reshaping its identity, transforming from a domestic ticketing service into a global digital travel player.
In this journey, Bookme has received an acquisition offer, rejected it and is currently reviewing another. It has cemented partnerships across borders as it looks forward to an era of exponential growth.
The Saudi launchpad
When Faizan Aslam first set out to build Bookme in Lahore back in 2014, few could have predicted just how quickly it would become a household name. At that time, Pakistan’s digital landscape was still finding its feet. Internet usage was limited, eCommerce was little more than an experiment, and banks clung to paper-based systems as though the digital revolution was still decades away. Yet, in the stubborn gaps of an underdeveloped digital economy, the CEO of Bookme saw a possibility. That of expanding Bookme’s footprint abroad.
That pivot took a decisive turn when the company received an invitation to a major conference in Saudi Arabia. Having seen an earlier death after a short stint in Myanmar, Faizan says he was wary of expanding into the Middle East but did so eventually because of an offer for partnership. One that would have
made their entry into the Middle East easy and cost effective. In fact Bookme is now expanding into the region using partnerships as a go-to-market strategy to even expand into the African market.
The decision to enter into the Saudi market was difficult. One would even question whether this is a sensible decision given that Bookme’s current market, Pakistan, is still unconquered. Bookme’s user base in Pakistan is around 15 million. Different organisations have attempted to solve the question of how many internet users there are in Pakistan. Most agree that it is somewhere between 38-54%. That would still mean a vast market is still untapped. On the other hand, the Saudi population is only 36 million people, with local competition like Almosafer and Almatar having strongholds in the country. Bookme still chose to expand.
“It was one of those moments when you realize the curve you’re standing on,” Aslam explained in conversation with Profit. “In Pakistan, adoption of online services is still slow. People hesitate, few banks still remain traditional and digital transactions make up barely twenty percent of all activity. But in Saudi Arabia, more than 90 percent of the population is already comfortable transacting online. For us, the question wasn’t if we should expand, it was how fast we could integrate.”
The Saudi connection began not only with the conference but also with strategic networking. Bookme’s leadership met with top executives, including the CFO of a major Saudi company, and quickly recognized the opportunities available in the Kingdom’s tech ecosystem. From there, partnerships began to take shape and agreements that would anchor Bookme in one of the Middle East’s most digitally advanced markets.
The contrast between Pakistan and Saudi Arabia could not be starker. In Pakistan, Bookme operates in a massive consumer market where the net margins in digital ticketing remain razor thin, ranging between 2%-3%. In Saudi Arabia, on the other hand, the population may be smaller, but the margins are healthier, between 7 to 9 per cent, and digital trust is already built into everyday life. This divergence is precisely what has convinced Aslam and his team that Saudi Arabia can serve as a launchpad for broader international growth.
Bookme’s credibility abroad is not being built from scratch. At home, the company has already demonstrated its ability to integrate with traditional financial systems. More than 25 banks, mobile wallets or fintech compa-
nies are connected to Bookme in Pakistan, a remarkable feat in a financial sector often described as “old school.”
Many banks continue to limit themselves to basic services, but Bookme carved a niche by offering seamless connectivity and smooth transaction pathways. For Aslam, this history matters. “If we could manage integrations in Pakistan, with all its legacy systems and limitations, we can do it anywhere. That’s why we feel confident about Saudi banks and, in time, financial institutions beyond,” he says.
“In the beginning, when we had no investment but wanted to reach millions, we
If we could manage integrations in Pakistan, with all its legacy systems and limitations, we can do it anywhere. That’s why we feel confident about Saudi banks and, in time, financial institutions beyond
Faizan Aslam, CEO of Bookme
looked at China and drew inspiration from WeChat and Alipay. Over time, we managed to onboard most of the banks in Pakistan and only then did we realize something surprising: banks in the rest of the world still didn’t offer the kind of services we had built inside Pakistani banking apps. Whether it was the GCC, Africa, or even Europe, those integrations simply didn’t exist. That realization opened our eyes to a much larger opportunity. What started as a scaling strategy in Pakistan has now become a blueprint we believe can transform digital transactions globally. And very soon, you’ll see Bookme taking this model into other parts of the world.”
Technology is another area where Bookme has worked quietly but ambitiously. The latest version of its app is more than just a booking tool, it is an intelligent platform that detects a user’s location through IP address and defaults its offerings to the country they are in. For a traveler arriving in Riyadh, the app automatically highlights Saudi inventory. For someone opening it in Karachi, Pakistani routes and services appear.
The go-to-market partnerships
The move into Saudi Arabia has already taken concrete shape. Bookme recently partnered with flyadeal, the Kingdom’s budget airline. Even more significant is Bookme’s collaboration with Mrsool, one of Saudi Arabia’s most popular super apps with over eight million users. Known primarily as a delivery platform, Mrsool has been expanding into lifestyle services, and Bookme’s integration fits neatly into that model.
By embedding flight and hotel booking options inside Mrsool, Bookme gains access to a vast, digitally engaged audience, while Saudi users enjoy the convenience of managing deliveries and travel from a single application.
Another name on the table is Resal, another super app where early-stage collaboration is underway. Mrsool has just started to roll out Bookme services to Mrsool App users and in less than 2 weeks the entire Mrsool
customer base will have access to them. “These partnerships are at the beginning, but they represent the future of how services will be delivered,” Aslam observed.
Resal is a rewards company and very popular in Saudi Arabia. Each time a Saudi customer uses the Resal app, they accumulate points. With its integration in the Resal app, these points can be redeemed by purchases on Bookme.
Still, success in Saudi Arabia is not only about numbers. For Bookme, it is also about credibility. By demonstrating its ability to partner with major players in the Gulf, the company sends a clear signal to potential partners in other regions and that is part of the bigger story.
It is currently in the process of expanding into Africa as well. In fact one of the main benefits of moving into the Middle East is the region’s affinity with the African markets. The Middle East and Africa usually come in business discussions together. Being closer, when any of Bookme’s Saudi partners expand into Africa, they will automatically allow Bookme’s expansion into Africa. For now, Bookme is in the process of entering Africa by partnering itself with a massive global conglomerate. Announcement in this regard is expected soon. If played well, it will usher in an era of exponential growth for Bookme.
Numbers testify to this. Together with Pakistan. its new partnerships are expected to bring $20 million GMV this year for Bookme. In three years, this number is expected to reach the $100 million mark - a feat few startups are able to achieve.
For Pakistanis, this transformation is noteworthy. A decade ago, the idea of a local tech company competing in regional travel markets would have seemed fanciful. Today, Bookme is not only competing but positioning itself as a bridge between South Asia and the Middle East. The company’s new app, its partnerships with Saudi super apps and its proven ability to integrate with conservative banking systems all point toward a conclusion that Bookme is no longer just a national service but an international contender.
Acquisition talks underway
Bookme’s rise has attracted the attention of global heavyweights. At one point, Bookme received a buyout offer at a $100 million valuation cap from a global ride hailing giant. Tempting as the number was, the management of Bookme politely declined. If they had gone with the $100 million offer, a few years down the line, if the company had reached a valuation higher than $100 million, the acquirers would still have paid a $100 million price for the company. The company holds bigger potential than that, and Faizan’s instinct in this regard has played out in his favour.
The company has expanded abroad, quietly setting up operations in international markets, proving that its model can “travel”. And while Bookme was taking its model abroad, a new suitor stepped forward. A global travel powerhouse with deep pockets is currently in conversation with Bookme for an acquisition at a price north of $100 million this time.
For now, negotiations continue behind closed doors but one thing is certain: what began as a local ticketing service is no longer just a local story. It is a case study which attracts attention and intrigue. What began in Lahore as a ticketing solution has now become a platform that promises to reshape cross-border travel experiences. For a country still finding its digital footing, Bookme’s journey is a reminder that innovation often comes quietly but leaves behind sweeping change. Bookme’s foray into Saudi Arabia reflects both the promise and the challenges of Pakistani startups going global. While its strong user base and banking integrations give it credibility, the company will need to prove that it can thrive in markets where competition is sharper, margins are higher, and consumer expectations are uncompromising.
If Bookme can translate its local resilience into international agility, it may well set a precedent for Pakistan’s tech ecosystem to look beyond borders. If it struggles, however, it may also expose the limitations of models that work locally but stumble under global competition. n
What’s all the fuss about Green Financing?
ACCA and PBC outline strategies for investors, companies, and regulators to build
a
green economy from the ground up
PProfit Report
akistan stands at a critical crossroads. Identified by the World Bank as one of the countries most vulnerable to climate change, the nation faces mounting environmental challenges that threaten its agricultural backbone and economic stability. Yet within this vulnerability lies unprecedented opportunity, a chance to transform Pakistan’s economy through sustainable business practices and green finance.
A comprehensive new report from ACCA (Association of Chartered Certified Accountants) and the Pakistan Business Council (PBC) reveals how the country can build a robust case for green business, turning climate challenges into competitive advantages through strategic sustainable investing and enhanced corporate reporting.
The sustainability imperative
The numbers paint a stark picture. A Boston Consulting Group study estimates that by 2050, South Asia faces the highest climate risk exposure globally at 15% of GDP if current policies re-
main unchanged. For Pakistan specifically, this translates to a funding gap of 16.1% of GDP, significantly steeper than the global average, to achieve sustainable development goals.
“According to the World Bank Group, Pakistan is one of the countries most vulnerable to climate change,” notes the report, citing factors including geographical diversity, exposure to climate hazards, and heavy dependence on agriculture and water resources.
This vulnerability in turn is driving innovation. The report reveals that 71% of surveyed Pakistani businesses already disclose environmental, social, and governance (ESG) information in some form, signaling widespread recognition that sustainability is no longer optional, it’s essential for survival and growth.
The business case becomes clear
The economic argument for sustainable business is gaining strength globally, and Pakistan is well-positioned to benefit. McKinsey research highlighted in the report shows that products making ESG-related claims averaged 28% cumulative growth over five years, compared to 20% for traditional products. In emerging markets, consumer preference for sustainable
products appears even stronger.
The green energy sector exemplifies this opportunity. According to the International Energy Agency, the global green energy market could exceed $2 trillion by 2035, rivaling the crude oil market. For context, this goes beyond even the $1.7 trillion global fashion industry.
“Capital markets are an important conduit for connecting investments to businesses,” the report emphasizes, noting that publicly traded sustainable finance products reached $7 trillion globally in 2023, four times their 2018 valuation and representing 5% of the global bond market.
Sustainability reporting takes center stage
Perhaps no development is more significant for Pakistan’s green transformation than the recent adoption of international sustainability reporting standards. In January 2025, Pakistan’s Securities and Exchange Commission (SECP) announced the phased implementation of IFRS S1 and S2 standards for listed companies, beginning with reporting periods from July 2025.
This positions Pakistan among the global leaders in sustainability disclosure. The IFRS
Foundation reports that 30 jurisdictions representing 57% of global GDP have decided to use or are implementing ISSB standards.
“The value that transparent and standardised reporting brings to these companies is something which they have to realise as a business case for themselves,” observed a policymaker during the report’s research roundtable.
Policy innovation and islamic finance synergies
Pakistan’s policy framework for green finance has evolved significantly. The State Bank of Pakistan’s 2017 Green Banking Guidelines embed environmental considerations into the banking sector, while 2021 guidelines for green bonds provide frameworks for sustainable investment vehicles.
The report identifies a particularly promising avenue: the synergy between Islamic finance principles and sustainability goals. Over half the surveyed businesses cite Shariah compliance as a factor in investment decisions, suggesting untapped potential for Islamic sustainable finance products.
This alignment isn’t coincidental. Research by the CFA Institute and Principles for Responsible Investment shows that Islamic finance promotes ideas reflecting UN Sustainable Development Goals priorities, including equality, social justice, and shared economic prosperity.
Success stories emerge
Policy frameworks are already yielding results. In 2021, the Water and Power Development Authority issued Pakistan’s first Green Eurobond, raising $500 million for hydroelectric projects. The “Indus bond” attracted $3 billion in subscriptions, six times the target, demonstrating strong investor appetite for Pakistani green investments.
More recently, 2025 saw Pakistan’s first PKR-denominated green bond, the Parwaaz Green Action Bond, mobilizing Rs 1 billion for environmentally sustainable projects and becoming the first green bond listed on the Pakistan Stock Exchange.
Challenges and solutions
The transformation isn’t without obstacles. The report identifies key challenges including limited comparability across sustainability reports, preparation costs particularly for smaller
organizations, and the risk of greenwashing undermining stakeholder trust.
To address these issues, the report emphasizes four critical enablers for successful sustainability reporting: digital technology and AI integration, leveraging accountancy and finance professionals’ expertise, comprehensive capacity building, and enhanced collaboration across organizational departments.
“The roundtable session highlighted the continuing importance of training and development at all levels,” the report notes, pointing to Pakistan’s incorporation of sustainability education into director training programs for listed companies.
“Green”lighting global practices
The report concludes with specific recommendations for three key stakeholder groups. Investors should demand stronger green finance policies, prioritize investments with tangible sustainability impact, and integrate climate risks into valuation models while holding businesses accountable for transparent reporting.
Businesses must prepare for mandatory sustainability reporting through capacity building and system upgrades, align strategies with Pakistan’s Green Taxonomy, and strengthen
internal collaboration to foster sustainable practices. Regulators should support capacity building for climate risk reporting, ensure independent assurance of sustainability reports, provide financial incentives for green investment, and expand green bond regulations.
The report paints a picture of a country ready to embrace its green transformation. With strong policy foundations, growing business awareness, and emerging success stories, Pakistan has the tools needed to turn climate vulnerability into competitive advantage.
“No one can do everything, but everyone can do something,” ACCA Chief Executive Helen Brand observed during the research process, a sentiment that captures both the collaborative spirit needed and the individual responsibility each stakeholder bears.
As Pakistan implements its National Economic Transformation Plan with its focus on sustainable development across multiple sectors, the timing couldn’t be better for this comprehensive roadmap toward green business leadership. The question isn’t whether Pakistan can afford to invest in sustainability, it’s whether it can afford not to.
The green business revolution in Pakistan has begun. The only question now is how quickly the country can scale it to meet the magnitude of both the challenge and the opportunity ahead. n
Could the Saudi-Pak Defence Pact force Modi and Islamabad to play nice?
India’s economy relies heavily on the Gulf for remittances, trade, and oil. As the US pressures Modi to abandon Russian crude, Pakistan’s new relationship with Saudi Arabia could force the Indians to rethink their strategy on Pakistan
It is difficult to overstate the importance of this agreement. This is the first official mutual defence pact between two Muslim countries. Yes, there has been deep military cooperation within the Muslim world since modern nation states emerged after the second world war. But even at the height of the Ummah fervor of the 1970s no official agreement was signed declaring an attack upon one would be considered an attack upon the other. (Egypt and Syria did briefly form the United Arab Republic, but that lasted all of three years.)
By Abdullah Niazi
The Gulf Arab Countries are threatened. Nothing indicates this more than the speed with which the oil-rich leaders of the Arab world have been rushing to Pakistan for protection after Israel launched missile strikes on Doha. It barely took a week after the attack for Saudi Arabia, the beating heart of the GCC and Arab-American cooperation, to sign a mutual defence agreement with Pakistan.
The defence pact is probably Pakistan’s most significant military and diplomatic initiative of the past half century.
It is important enough that even the leadership of the Pakistan Tehreek i Insaaf, one of the largest parties in the National Assembly, has come out in support of it. For anyone that has been watching Pakistani politics since 2023, that alone signifies how important this pact is. It is an achievement that has a mandate and is being widely celebrated not just in Pakistan but also in Saudi Arabia and, to a lesser extent, in other parts of the Muslim world.
The alliance will also be closely watched
by the rest of the world. Already Pakistan and Saudi Arabia have indicated that they would be more than open to other Gulf Cooperation Council (GCC) members either joining their pact or signing similar agreements with Pakistan. Perhaps no country will be watching this more closely or with more trepidation than India. It has just been over four months since India launched attacks into mainland Pakistan, launching a four day military engagement that was only stopped by the intervention of the Trump Administration.
The Indians, to their detriment, learned that Pakistan can put up a fight. That lesson was the only thing they walked away with from the conflict. But India’s concerns about Pakistan’s defence pact with Saudi Arabia will not be military. It will be economic. Pakistan has proven it is capable of defending itself from Indian hostility. The true strength of this pact for Pakistan will not be Saudi jets or military assistance but rather the economic pressure Saudi Arabia and indeed the larger Gulf region can exert upon the Indians.
And when it comes to the Indian economy, the Gulf Arab States have considerable leverage.
This is the single most important military and diplomatic initiative in the past 50 years, after the Lahore Islamic summit. It is the first defence deal between two muslim countries, and Saudi Arabia is not just any muslim country but one of the richest countries in the world, with a strong diplomatic influence
Mushahid Hussain, former senator
The Russian Gambit
The role of the Gulf countries in the Indian economy is massive. The GCC is India’s single largest trading partner with volumes of $161.23 billion in 2024 according to India’s Ministry of Commerce. India actually maintains a trade deficit with the GCC largely because they are dependent on Gulf crude for their oil supply.
India’s second largest trading partner is the EU, but the single country with which they have the largest trade partnership is the United States. In 2024 India’s total goods exports to the United States were over $88 billion and their total imports were just over $43 billion. India’s relationship with both the GCC and the EU can only be described as stable. The relationship with the United States has been more troublesome. For months now President Trump has been attempting to strong-arm the Modi government, hitting them with a 25% tariff across all goods. The Indians have been scrambling to fix this problem ever since. One of the overtures they have been making is to cut down on their imports of Russian oil.
India’s trade relationship with Russia is fascinating and relatively new. Russian oil accounted for barely 2% of India’s total crude imports before 2022. Then came the Ukraine war. The EU and the United States sanctioned Russia. This left Russia without a market to sell its crude to. India has been filling that gap. In the year 2024-25, Russian crude made up 35% of India’s total crude oil imports with India importing 1754 barrels of Russian crude a day.
These imports have been serving India well. In 2022, when Russia invaded Ukraine and the world hit them with sanctions, the global prices of oil shot up. India, the world’s third biggest oil consuming and importing nation, spent $119.2 billion in 2021-22 , up from $62.2 billion in the previous fiscal year, according to data from the oil ministry’s Petroleum Planning & Analysis Cell (PPAC). This means India’s crude oil import bill nearly doubled as energy prices soared globally following the
return of demand and war in Ukraine. Oil from Russia has helped ease some of this inflationary pressure.
The second largest source of crude for India is Iraq, which provides around a thousand barrels a day. India has long looked for strategic partners to provide it with cheap oil. Imports from Iraq also increased exponentially after the 2003 invasion when Iraq had been ravaged by the Bush-Blair project.
But the GCC is no small player in this. Saudi Arabia, Kuwait, and the UAE combined provided more crude oil to India than even Iraq at nearly 1200 barrels a day. For all intents and purposes India’s oil supply is currently divided between three players: Russia, Iraq, and the GCC. While this has worked well for them in the past three years, India’s dependence on Russia is proving to be a vulnerability.
With US tariffs weighing heavy on them, President Trump has been insisting no tariffs will be eased on any countries continuing to
buy Russian oil until a ceasefire is achieved in Ukraine. While India has resisted pressure on this topic, last month, their state refineries stopped buying Russian Crude. India is increasingly feeling the pressure to switch from Russian oil. The switch will have to be towards the Gulf. Historically, the Middle East has been India’s biggest supplier and if Russia is out of the equation they will have to go back to buying more from the GCC.
“India
is in a state of shock”
Place all of this information in context and India emerges in a delicate position. The Modi Administration reacted to increasing global oil prices by buying cheap Russian oil. The Americans are not having it anymore. Unless India stops buying crude from Russia the United States, which is their biggest trading partner, will double down
Pakistan’s unique security relationship with Saudi Arabia
Pakistan and Saudi Arabia have long shared a security-partnership and trade relationship. Pakistan has helped Saudi Arabia militarily for many decades now. Most people know that Pakistani SSG Commandos participated in lifting the siege of Makkah in 1979, but that was not where the cooperation ended. Tens of thousands of Pakistani troops remained in Saudi Arabia during the Iran-Iraq war, with most recalled in 1988, though a smaller contingent stayed. In 2015, Pakistan’s parliament rejected Saudi’s request for troops in Yemen, but the relationship remained intact. Pakistan still provided some naval support, and both countries held joint military exercises. Former Pakistani Army Chief Raheel Sharif later led the Saudi-led Islamic Military Alliance, and Saudi troops participated in Pakistan’s 2017 Day Parade. In February 2018, the Pakistani military sent a brigade to Saudi Arabia.
This latest defence pact is the formal declaration of the relationship the two countries have maintained over the years. Its timing is meant to be a signal to Israel.
For their part, the Saudis are also pulling out all the stops. The visuals of the Prime Minister’s aircraft being escorted by Saudi fighter jets upon entering the Kingdom’s airspace have gone viral for a reason: such protocol has been unheard of before this. It became immediately clear why this was the case when the two leaders signed an agreement of mutual defence. Very simply put, the agreement binds Pakistan and Saudi Arabia to act in each other’s defence. An attack on one is to be treated as an attack on the other.
on 25% tariffs against Indian products. The only option the Indians have is to turn once again to the GCC. Historically, they have had a very good relationship with the Gulf, but Saudi Arabia has just signed a defence pact with Pakistan.
“India is in a state of shock, they are taken by surprise,” says former Senator Mushahid Hussain in a recent interview. “This is the single most important military and diplomatic initiative [by Pakistan] in the past 50 years, after the Lahore Islamic summit. It is the first defence deal between two Muslim countries, and Saudi Arabia is not just any Muslim country but one of the richest countries in the world, with a strong diplomatic influence,” he explains.
The current scenario has very much been shaped by the United States economic policy. The Trump Administration is unique in American history. Its foreign policy objectives have been similar to those of previous administrations. Trump wants an end to expensive wars, he has unequivocally supported Israel, and despite fears that he would be an isolationist, he has maintained the American appetite for global domination. His approach to achieving these goals, however, has been significantly different. Trump has been far less trigger happy
The United States’ role as a security guarantor has come under scrutiny as of late, and its credibility has been severely damaged
Maliha Lodhi, former permanent representative of Pakistan to the UN
than even his democratic predecessors, particularly the Obama Administration. In his last year in office, President Obama dropped nearly 27,000 bombs in over seven countries including Pakistan. And this was at a time when the drone attacks were winding down.
President Trump, on the other hand, seems more interested in throwing America’s economic weight around to get his way. The gravitational pull of the United States economy can be as potent a threat as its military might. He has been able to wield the threat of economic ruin to stop, as he claims, six wars in six months including between nuclear armed India and Pakistan.
The one situation he has not been able to wrangle has been Israel’s brutual attack on Gaza, which is now being described by the United Nations as a genocide on four counts. So much so that it has not been able to protect allies like Qatar from direct Israeli attacks.
Trump’s inability to control Israel is what has put Saudi Arabia firmly in Pakistan’s camp. “The United States’ role as a security guarantor has come under scrutiny as of late, and its credibility has been severely damaged,” says Maliha Lodhi, former permanent representative of Pakistan to the UN. “At this point, it is clear that Pakistan has taken up the role of a security provider, not just for Saudi Arabia but for the Middle East. It is important to take into consideration the timing and the context of this agreement, since in the aftermath of Israeli aggression against Qatar, Arab countries have started to look elsewhere for security guarantees,” she said in an interview.
Pakistan’s role
Zulfiqar Ali Bhutto was the first Pakistani leader to really try and position Pakistan as a defender of the Muslim world. The historic OIC summit held in Lahore in 1974 was an important moment in this positioning. This was the first time the leaders of Pan-Arabism were joining with the Muslim countries of Asia and North Africa to try and revive the concept of the “ummah.” It was a historic pipe-dream that has never come to fruition. Even though your friend from college that joined the Jamat Islami might tell you a common Islamic currency or even a joint army was right on the edge of creation when Zia ul Haq’s plane came crashing down, this was never the case. Nawaz Sharif’s plans to be known as “Amir ul Momineen” also never really caught on. But even as the Arab World drifted away from the idea of Muslim unity, it did not stop Pakistan from positioning itself as the muscle of such a unified front.
This offer of protection has been at the heart of Pakistan’s relationship with the rest of the Muslim world, particularly with the Gulf. It is part of the reason Pakistan survived the
Pakistan has always used the term ‘strategic assets’ for its nuclear & missile programs. Most likely, Pakistan will now be able to buy US weapons it needs, with Saudi money, which the Trump administration seems willing to sell
Hussain Haqani, former Ambassador to the US
possibility of default in 1999. When the US imposed sanctions on Pakistan following the nuclear tests, the Saudis kept rolling over money we owed them for oil shipments and eventually wrote them off for all intents and purposes. It is why the Gulf states have regularly bailed Pakistan out one economic crisis after the other. On some level it has been understood that when push comes to shove, the Gulf will be able to call upon Pakistan.
That is the debt Pakistan is now returning, and it seems the leadership is cognisant of exactly what they have promised Saudi Arabia and what they want to promise the rest of the Gulf. According to Hussain Haqani, former Ambassador to the United States, the terms ‘Strategic Mutual Defense Agreement’ implies that the treaty covers nuclear and missile defence. “Pakistan has always used the term ‘strategic assets’ for its nuclear & missile programs,” he says. “Most likely, Pakistan will now be able to buy US weapons it needs, with Saudi money, which the Trump administration
seems willing to sell.”
Pakistan must not be under any illusions. This agreement with Saudi Arabia is not some sort of Ummah pact. In fact, it would not be a stretch to say the concept of the Ummah no longer exists among the leadership of the Muslim world. Palestine has always been the core issue that has united the Muslim World. Pakistan wanted Kashmir to be a similar issue. The Arab states have adopted a policy in both cases of doing business with India and Israel while giving diplomatic support to the Palestinians and the Kashmiris. If any desire for a united Muslim front was possible, it would have been mobilized in the defence of the Palestinian people.
What we have in the shape of the Pak-Saudi Defence Agreement is the cementing of Pakistan’s position as the defender of the Gulf. It will complicate our relationship with Iran, but all in all it is a cause for confidence in Pakistan.
Can Modi play nice?
There are many benefits to Pakistan from the agreement with Saudi Arabia. The Saudis will now be more invested than ever in Pakistan’s economic stability. Pakistan also has deep interests in the security of the Gulf considering how many Pakistanis have property parked in the UAE and the amount of remittances that workers send back home from the Gulf countries. Pakistan is also a big importer of oil as well as gas from the GCC.
It is not unimportant in this context that Israeli officials have been mentioning Pakistan by name through different diplomatic channels. The country’s main defence of their attack on Doha was to point towards the US opera-
imports
tion in Abbottabad which found and killed Osama Bin Laden. Pakistan’s representatives to the UN have been responding robustly to such claims. However, it is clear that Israel is baiting Pakistan on some level. The impunity with which Israel has successfully operated will only embolden them further. That is why the Gulf Arab states are looking to diversify their security guarantees.
The biggest benefit, however, will be how this affects Pakistan’s relationship with India. India does not just rely on the GCC for oil.
“With India’s markets in the US and Europe clouded by possibilities of higher tariff walls and other issues, New Delhi possibly needs to think afresh to renew its engagement with the Gulf countries. This zone, which has witnessed significant growth in recent years due to its geographical proximity, complementary economic structures, and shared interests in technology and innovation, promises new trade growth possibilities,” write D Dhanuraj, Chairman of Centre for Public Policy Research (CPPR) in India, and Gazi Hassan, a Research Scholar of International Politics, in a joint article for The Secretariat.
well-thought-out FTA is the need of the hour, which will solidify the partnership, unlocking new opportunities for mutual economic growth. Additionally, the nine-million-strong Indian expatriate community forms the backbone of the GCC’s labour force, particularly in construction, healthcare, and IT.”
“Amid global trade uncertainties, India needs to up its game in the GCC zone. A
India’s current position in the world requires that they not just maintain their relationship with the GCC but expand. At such a moment, India’s great rival has signed a mutual defence treaty with the beating heart of the GCC, Saudi Arabia, with other GCC members indicating their interest in signing similar agreements. What will Modi do in this scenario? His rhetoric before, during, and after the military conflict in May indicates his opinions on Pakistan are unlikely to change any time soon. Besides, hoping for better ties or trade between the two countries would be too much to ask for from the BJP government. What we can hope for is quiet. If the treaty with Saudi Arabia can convince India to simply not engage with Pakistan militarily, that will be enough. The true success of this agreement will be if it is not tested in the first place. The hope from both Saudi Arabia and Pakistan will be that the agreement will be enough of a deterrent for both India and Israel. However, if push comes to shove, both countries must remember that the first instance where one is harmed will be crucial. If Saudi Arabia is attacked, for example, a rapid response from Pakistan will let the world know this partnership means business. n
Millat Tractors’ revenues tank over 43% in annus horribilis for Pakistani farmers
Even before the floods hit the country, Millat’s revenues and profits were drowning
Profit Report
Millat Tractors Limited
(PSX: MTL) has posted one of its most difficult years in recent memory.
For the financial year ended 30 June 2025, unconsolidated net sales fell to Rs52.1 billion, down 43.0% from Rs91.5 billion the previous year, as demand for farm machinery softened across the country. Profit after tax slid 38.0% to Rs6.37 billion, with earnings per share at Rs31.9. The company did keep a tight hold on costs and pricing – its gross margin rose to 26.6% from 23.4% – but that improvement could not offset the shock to volumes and revenues. These figures are taken from the company’s statutory filing to the Pakistan Stock Exchange, where the statement of profit or loss sets out the declines in revenue and
profit clearly.
Brokerage analysis helps explain the mechanics of the downturn. According to Arif Habib Ltd (AHL), Millat sold 18,580 tractors in FY25, down 38.0% from 30,203 in FY24. In a note issued to clients, Arif Habib Ltd’s analysts highlighted an industry wide trough in orders, even as the company eked out a stronger gross margin on the back of pricing, mix and procurement discipline.
The pain was visible quarter to quarter. In 4QFY25, revenue fell 45.0% year on year to Rs12.1 billion and slipped 3.0% quarter on quarter as volumes contracted to 4,062 units (down 43.0% year on year and 8.0% sequentially). Gross margin for the quarter softened to 25.0% (from 28.3% in 3Q), a reminder that fixed cost absorption becomes harder when the assembly line slows.
What makes the year more sobering is timing. The revenue collapse unfolded before
Pakistan’s latest monsoon devastation hammered the farm economy in July and August. OCHA’s situation reports and UNICEF’s September update describe Punjab’s worst flooding in decades, with all three major rivers – Sutlej, Chenab and Ravi – running exceptionally high, millions affected and large swathes of cropland inundated. The Associated Press reports 2.6 million people displaced in Punjab and 2.5 million acres of farmland damaged. In other words, Millat’s FY25 contraction came ahead of a climate driven shock that could further weigh on mechanisation budgets in the months that follow.
Even in the gloom, a couple of line items show managerial response. The company trimmed distribution costs year on year, kept administrative expenses in check relative to inflation, and lifted cash generation to support the dividend. AHL’s exhibit shows distribution expense down 14.0%, other expenses down
23.0%, and an effective tax rate easing to 21.0% from 39.2%, cushioning part of the operating hit. Still, profit before tax halved to Rs8.06 billion, an unambiguous reflection of the sales drought.
Millat’s story is inseparable from the history of agricultural mechanisation in Pakistan. Founded in 1964 (as Rana Tractors and Equipment) to import and market Massey Ferguson tractors, the company began assembling tractors from semi knocked down kits by 1967. Following the 1972 nationalisation drive, the enterprise – renamed Millat Tractors Limited – worked under the Pakistan Tractor Corporation to assemble and market tractors from completely knocked down kits. By 1982, Millat had inaugurated the country’s first tractor engine assembly line, expanding machining capacity by 1984 to localise critical components.
The pivot that defined the modern company came in 1992, when Millat was privatised through an employee buyout, followed by the inauguration of a new assembly plant and a deliberate strategy of deep localisation supported by a cluster of allied companies. The group’s structure built resilience – Bolan Castings for foundry needs, Millat Equipment for gears and shafts, and Millat Industrial Products for batteries – reducing import dependency and enabling cost control. The company’s own corporate and annual report timelines track these milestones, from the licensing arrangement with AGCO (Massey Ferguson) to investments in quality systems and energy efficiency.
Today, Millat is based near Lahore and is one of the two dominant tractor manufacturers in Pakistan, operating under a licensing arrangement with AGCO for the Massey Ferguson brand. Over decades, the company has combined assembly with component manufacturing and vendor development to achieve localisation levels often cited above 90.0% on several models, a point underscored by industry coverage and analyst briefings. The strategy has delivered scale in good years and a cost buffer in bad ones.
From the investor’s perspective, Millat is a long standing industrial name whose fortunes rise and fall with farm incomes, credit availability and public programmes to promote mechanisation.
The backbone of Millat’s revenues is a stable of Massey Ferguson tractors spanning roughly the 50–85 horsepower range, with two wheel and four wheel drive variants positioned for different crop belts and haulage needs. Familiar model names – MF 240, MF 260, MF 350 Plus, MF 360, MF 375 and MF 385 – make up much of the installed base, with extensive parts availability and a network of dealers and workshops. The company’s own spare parts portal and product guides list model wise parts, implements and attachments, under-
scoring how the after sales ecosystem supports the brand.
Beyond tractors, Millat has long sought to diversify by offering forklift trucks (under a licensing arrangement), diesel engines, diesel generator sets, and a range of allied agricultural implements. Company materials and mainstream press describe this wider portfolio, which provides counter cyclical niches in construction, warehousing and power backup even when tractor sales are soft. The group’s engineering arms – Millat Equipment and Bolan Castings – feed the tractor line while also giving the company industrial heft.
The power solutions line has become more visible in recent years, with Millat promoting diesel generator sets for industrial and commercial clients. While the power business does not approach tractors in scale, it rounds out the product mix and keeps workshops utilised when agricultural demand is weak. The official product pages highlight the offering and service support, positioning it as a reliability play in an economy where grid instability remains a fact of life.
Exports – mainly of tractors and components – are now a defined, if still modest, part of the mix. Company and media statements through FY24 pointed to 2,500–3,000 units exported to destinations such as Afghanistan, Africa and parts of the Middle East, with official communications celebrating an FY24 milestone of $17 million in tractor, engine and component exports. That push both validates local manufacturing quality and gives Millat a lever that is less tied to Pakistan’s farm cycle.
If FY24 showcased a recovery, FY25 was a stress test – one that is shaping Millat’s current strategy on several fronts.
Millat’s long running localisation drive – frequently cited above 90.0% on many models – remains the first line of defence when exchange rate swings and import bottlenecks threaten margins. Analyst briefings last year connected the dots between localisation, vendor development and resilience, noting how the company’s in house machining and the group’s foundry and gear making arms help stabilise costs. The stronger 26.6% FY25 gross margin alongside a bruising fall in volumes suggests pricing power and localisation combined to cushion, but not eliminate, the pain.
A pivotal step in late 2024 was the merger of Millat Equipment Limited into Millat Tractors, approved by the Competition Commission of Pakistan. Strategically, the move folds a key supplier – gears, shafts, hydraulic pumps – into the parent, promising procurement synergies, shorter lead times and a cleaner capital structure. In a low volume year, those micro efficiencies matter.
The company continues to lean on non tractor lines – generators, forklifts, implements
and spares – to ensure workshops, dealers and service technicians remain engaged even when farmers delay tractor purchases. The company’s own site and press coverage reinforce this multi product posture as central to smoothing cash flows and maintaining channel health through the cycle.
Millat’s parts portal and product literature illustrate the depth of its after sales franchise. In a downturn, parts and service keep dealers solvent and sustain brand equity in rural markets. That infrastructure will be central to any FY26 recovery, especially as flood affected districts repair equipment and resume fieldwork.
Tractor demand in Pakistan is acutely sensitive to credit conditions, input prices and public programmes. The Punjab Green Tractor Scheme, which ran a first phase in late 2024 and opened Phase II registrations in mid August 2025, can lift near term orders for qualifying models – but the monsoon flood emergency complicates delivery schedules and farmer cash flows. Government portals and notices confirm Phase II’s launch and balloting, yet the humanitarian situation across farm districts may delay actual purchases. For Millat, execution will mean aligning production slots and dealer financing with the pace of subsidy disbursements and post flood rehabilitation. FY25 ended on 30 June, before the full force of the monsoon crisis. OCHA and UNICEF report widespread devastation through July–September, with Punjab enduring some of its worst flooding in decades and millions affected nationwide. AP’s field reporting underscores the agricultural toll – homes and 2.5 million acres of farmland damaged. For a tractor maker, that means a complex near term demand path: some farmers delay capex to rebuild, while others may require new equipment to replace damaged assets once relief and credit arrive. Millat’s response – ranging from after sales support in flood hit districts to flexible production planning – will be decisive.
Where does that leave investors and industry watchers? With a pragmatic checklist. Watch the cadence of Punjab’s Green Tractor disbursements and the pace of rehabilitation across flooded districts. Track how Millat integrates Millat Equipment and whether those synergies show up in working capital and margin lines. And look for signals that farmer sentiment is stabilising – harvest linked cash flows, input price relief, and improving credit availability.
For now, FY25 reads like an annus horribilis for Pakistani farmers and the companies that serve them. Millat’s task is to ensure it is also a turning point, not a lasting trend. Its long history suggests it knows how to endure; the next few quarters will show whether it can also rebound. n
Declining production hits PPL’s bottom line
Net income fell 19% due to a combination of falling production and falling prices
Profit Report
Pakistan Petroleum Ltd (PPL) has posted a weaker set of full‑year numbers after a year marked by falling field output and softer crude prices – an uncomfortable combination for an upstream com‑ pany that earns on barrels and molecules lifted. For the twelve months to 30 June 2025, profit after tax fell 19.0% to Rs92.0 billion, translat‑ ing into earnings per share of Rs33.8 versus Rs42.0 a year earlier. Full‑year sales slipped 16.0% to Rs242.5 billion as both oil and gas production nudged lower across the portfolio. The company paired its announcement with a fourth‑quarter cash dividend of Rs2.5 per share, bringing the FY25 payout to Rs7.5.
The core operational story is straight‑ forward: production declined. PPL’s average oil output fell 10.0% to 10.2 k barrels per day, while gas output also dropped about 10.0% to 480 mmcfd. Layer on a weaker crude tape –Arab Light averaged $75.8 per barrel in FY25 against $87.0 in FY24 – and the top line was always going to be under pressure. Nash eed Malik, an analyst at Arif Habib Ltd, an investment bank, attributes the 16.0% revenue contraction largely to this dual hit of lower volumes and lower prices, a pattern that is also
evident in 4QFY25, when revenue fell 19.0% year‑on‑year and 19.0% quarter‑on‑quarter to Rs51.8 billion.
Margins narrowed as fixed costs met fewer produced units. Gross margin for FY25 slipped to 62.6% from 65.6%, with 4QFY25 clocking an even lower 57.4% as output soft‑ ness accelerated into year‑end. Management contained parts of the cost base: exploration expense fell 18.0% to Rs15.7 billion for the year and was down 43.0% in the fourth quarter, helped by the absence of a dry well charge that hit the comparable period last year. Even so, the operating decline was steep enough to drag profit before tax down 13.0% to Rs139.1 billion.
The balance‑sheet picture underscores the tightrope PPL continues to walk between investing for the long term and marshaling cash in the near term. Trade receivables –largely the energy sector’s chronic payables to upstream producers – stood flat at roughly Rs592.4 billion at year‑end versus the previous quarter, a reminder that circular‑debt dynam‑ ics still bind. Cash and short‑term investments totalled about Rs80.0 billion, down from Rs112.0 billion twelve months ago, a decrease Malik, the analyst at Arif Habib Ltd, attributes primarily to a Sui lease payment. Put different‑ ly, liquidity that could have gone to the drill bit or compression projects was partly diverted to
unavoidable obligations.
Quarterly dynamics offered a small silver lining. 4QFY25 EPS of Rs7.1 was 8.0% higher year‑on‑year, even as it fell 11.0% sequentially, suggesting that treasury income and a lighter exploration charge helped the bottom line relative to last year’s fourth quarter. But the sequential decline – aligned with the 19.0% quarter‑on‑quarter drop in revenue – speaks to the near‑term challenge of coaxing more output from ageing domestic fields while the price deck remains middling.
The result in one sentence: FY25 was not a bad year for costs, but it was a poor year for barrels and molecules – and that is what ultimately shows up in profits.
PPL is one of Pakistan’s oldest industrial names, a company whose identity is insepara‑ ble from the discovery and long stewardship of Sui, the gas field that underwrote the coun‑ try’s first great wave of urban and industrial growth. It began life in the early years after Independence as a stewardship vehicle for exploration in the country’s onshore basins, and over seven decades has evolved into a state‑controlled, publicly listed operator that straddles Balochistan, Sindh, Punjab and Khyber Pakhtunkhwa with a portfolio of producing fields, development projects and exploration leases.
That dual identity – majority gov ernment‑owned, yet answerable to public shareholders – has shaped PPL’s operating philosophy. On the one hand, it carries a public mandate: keep gas flowing from mature reservoirs that still serve as the backbone fuel for households, fertiliser and industry; keep investment steady in basin‑opening prospects whose rewards, if they come, are social as much as financial. On the other hand, it is assessed on private‑market metrics: production growth, reserve replacement, unit operating costs, dividend policy, and the ability to turn a rupee of sales into cash, rather than an IOU trapped in the power‑and‑gas receivables maze.
The company’s portfolio reflects those tensions. Much of PPL’s output today comes from brownfield assets – long‑producing gas fields with natural decline curves that can be mitigated but not eliminated. The engineer ing toolkit is familiar to upstream operators worldwide: workovers, infill drilling, artificial lift, compression, and increasingly, enhanced recovery techniques adapted to the geolo‑ gy of Pakistan’s onshore basins. Alongside those efforts runs a pipeline of near‑field and step‑out exploration prospects that aim to add incremental molecules close to existing infra structure. The advantage of such prospects is speed to market and capital efficiency; the risk is that they rarely deliver the material uplift that resets a decline trajectory.
As a company, PPL is also a deeply Pakistani institution. The workforce pipelines talent from engineering schools in Lahore, Karachi and Quetta into field postings in often remote districts. Corporate social responsibil ity spending tends to be concentrated in host communities around producing assets, with a focus on health, education and livelihoods – a pragmatic approach that reduces friction and, in some districts, improves security conditions for field operations. The company’s base in Ka‑ rachi keeps it close to regulators, offtakers and capital markets, but its operational heartbeat is inland, where the wells are.
Financially, PPL’s dividend posture has always been a calibration between cash generation and the realities of the energy value chain. FY25’s Rs7.5 payout was higher than last year’s Rs6.0, an increase that speaks to the cushion provided by other income even as operating performance slipped. But until production turns, payout growth will continue to be a function of treasury returns and the pace at which trade debts are monetised. Trade receivables of Rs592.4 billion show how accounting profit can diverge from cash in the energy complex.
To understand PPL’s FY25, it helps to situate it in a national exploration context. Pakistan’s onshore gas system is mature. The big, basin‑defining discoveries of the last
century have been on decline for years. Around them, a constellation of smaller fields has provided incremental supply, but rarely the kind of volume pulse that can keep national output flat, let alone growing, for long. Against that backdrop, FY25’s 10.0% drops in oil and gas production at PPL are not an anomaly –they are a sharp expression of a broader trend across the upstream sector.
In such a world, the health of the explo‑ ration and development pipeline becomes de‑ cisive. PPL’s exploration expense fell 18.0% in FY25, and 43.0% in the fourth quarter, thanks in part to the lack of a dry‑well charge that had burdened the previous year’s quarter. That is good news for the income statement but can be a warning for the reserve‑replacement equation if sustained for too long. The company’s note does not imply that drilling has stopped; it implies that the mix shifted to lower‑risk, low er‑cost activity in the period and that dry‑well risk did not crystallise in 4QFY25 the way it did last year. The challenge will be to lean back into a drilling calendar robust enough to add new barrels and molecules at pace.
Industry‑wide, operators – PPL, OGDCL, Mari and a handful of smaller private players –have been emphasising near‑field exploration and appraisal as the quickest route to mar ketable volumes. In practice, that has meant step‑outs from known reservoirs, recomple tions to tap bypassed pay, and – where geology permits – fracture stimulation programmes to coax more gas from tight sands. The trade‑off is familiar: near‑field prospects carry high‑ er technical success rates but rarely deliver step‑change volumes; true frontier exploration tends to be capital‑ and risk‑heavier and, in Pakistan’s onshore basins, has not produced a basin‑opening discovery in years.
Then there are the cash constraints. The upstream sector’s working capital is entwined with the power and gas value chains via circular debt, which delays cash collection from offtak‑ ers. PPL ended FY25 with trade receivables of roughly Rs592.4 billion. That is not just an accounting curiosity; it is real cash that cannot be deployed to fund an ambitious drilling slate, to book drilling rigs for longer campaigns, or to invest in compression and gathering infrastruc ture that can sustain plateau levels in maturing fields. In this sense, other income’s 42.0% uplift to Rs24.2 billion – thanks to short‑term invest ments that reached Rs74.2 billion mid‑year – is a double‑edged sword: it shows treasury acu‑ men, but also the absence of enough immediate, high‑return projects to absorb that cash in the field at acceptable risk.
Another cross‑current is price. FY25 saw Arab Light averaging $75.8 against $87.0 the year before. For crude‑linked barrels, that is a direct hit to revenue. For gas, pricing is governed by policy formulas and contracts
that have periodically been revised to improve investor returns, particularly for tight and deep fields. Policy efforts do matter; they can tilt economics enough to green‑light prospects that would otherwise stay on paper. But policy cannot repeal geology or the time it takes to drill, complete and hook up wells in challeng ing terrains.
An often overlooked trend in Pakistan’s upstream is the quiet shift in portfolio eco‑ nomics. As mature gas declines and domestic demand stays high, the energy system leans more on imported LNG to bridge the gap. That raises the value (and the urgency) of domestic molecules, but it also sets a reference price that can skew policy debates around gas pricing for new discoveries. PPL and its peers have argued – sometimes publicly, more often in rooms with regulators – that a predictable, bankable price framework for tight, deep and offshore gas is essential if the country wants explora‑ tion risked and funded at scale. That argument is unlikely to fade in FY26.
Finally, there is the spectre of one‑off hits. FY24’s fourth quarter carried a dry‑well charge; FY25’s did not. Exploration is lumpy by nature; a quarter that looks clean can be fol‑ lowed by one with substantial write‑offs. The art for management is to smooth the drill‑bit enough that successes and failures distribute across quarters and the income statement does not whipsaw investors. The 4QFY25 exploration cost of Rs4.1 billion, down 43.0% year‑on‑year, shows what a quarter without a dry‑well looks like. It should not be mistaken for a new normal.
PPL’s FY25 is a study in how unforgiving upstream arithmetic can be. Oil at USD 75.8, gas at 480 mmcfd, and oil at 10.2 k barrels per day – all down from the previous year – flowed into a 16.0% revenue drop and a 19.0% fall in earnings, even with other income doing heavy lifting. The dividend nudged higher to Rs7.5, a signal of confidence and a nod to treasury gains, but the company’s equity story remains what it has always been: production.
There are positives to build on. Costs were controlled. The exploration line was lighter. Cash still sits on the balance sheet even after the Sui lease outflow. But the trade‑debt overhang of Rs592.4 billion is a structural constraint, and the geology of Pakistan’s ageing onshore fields is indifferent to good intentions. If FY26 is to look different, it will be because PPL slows declines in its base, executes a denser near‑field programme, and – if policy and partners align – takes intelligent shots at prospects with the potential to move the company’s needle.
Until then, the most important sentence in the FY25 report remains the plainest: pro duction was lower. For an upstream company, there is no more consequential line of text.
Despite stiffer competition, Toyota Pakistan closes best ever year in 2025
Net income rose to record levels even as Kia and Chinese automakers gained a significant foothold in the market
Profit Report
Indus Motor Company (IMC), Toyota’s publicy listed arm in Pakistan, has delivered the most profitable year in its history – despite a dramatically more crowded forecourt. For the year ended June 2025, profit after tax surged to Rs23.0 billion (EPS Rs292.7), up 53.0% year on year, while the board signed off on the company’s highest ever dividend at Rs176.0 per share. Even with South Korean and Chinese nameplates now firmly embedded in showrooms – and nibbling at niches from subcompact SUVs to pickups – Toyota’s Pakistan business expanded margins and volumes to close a record year.
The operational gears all turned the right way. Net sales climbed 41.0% to Rs215.1 billion, and operating profit more than doubled to Rs25.3 billion, as the gross margin improved to 15.0% from 13.0% a year earlier. EBITDA was up 84.0% to Rs31.5 billion, and net margin a full percentage point better than FY24. Profitability in the second half of financial year 2025 was materially stronger than the prior year half, underscoring that the step up was not confined to a single quarter.
Volumes were the story behind the story. Including both completely knocked down (CKD) and completely built up (CBU) units, Toyota’s shipments in FY25 grew 60.0% to 33,757 vehicles, outpacing an auto market that rose 40.0% to 223,799 units. In other words, Toyota did not just ride a cyclical upturn; it took share in the recovery. That achievement matters because the market it faced in FY25 was unlike any of the preceding five years –Kia entrenched in passenger cars, a clutch of Chinese SUV and pickup entrants, and an on again off again wave of used imports. Against that backdrop, Toyota still delivered its best year on record.
Management has been frank that tailwinds could fade. Flood damage across wide
swathes of the country will likely dent demand in coming months, and any liberalisation of used car imports – extending the permissible age from three to five years and allowing commercial imports – would pressure local assemblers. IMC warned that such a policy would risk “de industrialisation”, prompting a rethink of the local assembly model in favour of imports if the economics turned unfavourable. The caution is not idle; the company is preparing operational efficiency measures to defend margins if volumes soften.
Still, the record year affords financial resilience. The 2HFY25 EPS of Rs166.1 – versus Rs128.7 a year earlier – suggests momentum that can absorb shocks. The product mix also helped: within the combined Yaris/Corolla portfolio, Yaris accounts for about 70.0% of units and Corolla 30.0%, while institutional sales of all models are roughly 10.0% – a base of fleet demand that tends to be less rate sensitive than retail. That mosaic of buyers, from middle income city families to corporate and government fleets, cushioned the year’s ups and downs in affordability.
For shareholders, the headline is simple: record earnings, record dividend. For the industry, the subtext is more complicated: Toyota proved in FY25 that scale, distribution and a disciplined product cadence can trump the sheer novelty of new badges – at least for now.
Toyota’s presence in Pakistan is channelled through Indus Motor Company, a publicly listed joint venture assembler and marketer that has spent more than three decades localising production, deepening vendor capability and building a dealer network that reaches well beyond the big cities. The company’s identity is often reduced to its flagship Corolla, but in truth Toyota’s local portfolio now spans multiple price points and use cases: Yaris for the mass urban buyer; Corolla for families and fleet; Hilux for agricultural, construction and security customers; Fortuner
for the premium SUV bracket; and the Corolla Cross to bridge the SUV leaning middle. That multi segment footprint – anchored by robust after sales support – has been central to Toyota’s staying power through cycles of currency stress, rate spikes and policy zig zags.
Critically, Toyota’s model in Pakistan has not been to import and sell, but to assemble and localise. Management’s most recent briefings place localisation at around 60.0% for Yaris, Corolla and Corolla Cross, and 40.0–45.0% for Hilux and Fortuner – a candid acknowledgement that larger, lower volume ladder frame vehicles are harder to localise fully. Local content at these levels matters because every sharp rupee slide raises the cost of imported kits; each incremental domestic component softens that blow. It also feeds a broader industrial ecosystem of stampers, moulders and machinists that rises and falls with auto sector health.
The company’s public comments over the past year also show a manufacturer that sees itself as a stakeholder in policy outcomes. On the National Tariff Policy (2025–2030), for example, IMC has warned that a cut in CBU tariffs to 15.0% would make local CKD assembly uneconomic, forcing a pivot to imports. Whatever one’s view on consumer welfare and competition, the industrial calculus is straightforward: if tariff and tax structures reward imports over assembly, investment in tooling and vendor development will ebb. Toyota’s messaging has been that a vibrant local industry – competing against new entrants and imports alike – needs a predictable policy spine.
The upshot is a brand whose local history is as much about industrial habit as it is about consumer trust: invest in local parts where volume and tooling justify it; defend price and residual value with strong after sales; and keep the portfolio refreshed enough to meet the buyer where tastes are drifting.
The topline of FY25 was unmistakable:
Toyota grew faster than the market and did so with firmer margins. Management attributes the outperformance to three overlapping forces – portfolio breadth, a methodical product cadence, and pricing discipline compatible with a maturing competitive field.
Portfolio breadth first. Toyota’s range allowed it to straddle buyer segments that behave differently as conditions change. As management told analysts, Yaris carries the middle class urban story; Corolla and Hilux track rural and construction income; Fortuner sits at the premium end. That meant the company felt the flood impact across categories rather than in a single line, but it also meant no single model held the P&L hostage. Within the Yaris Corolla pair, the 70.0/30.0 mix leaned towards the more accessible Yaris, which likely aided volumes as rates stayed elevated for much of the year.
Product cadence was the second leg. The Yaris facelift – which management called a “major update” – drew a strong consumer response, refreshing the mass market anchor at a time when rivals were adding trims, screens and safety suites to win showroom comparisons. Meanwhile, the Corolla Cross broadened Toyota’s SUV reach. The company emphasised that the Corolla Cross, Yaris and Corolla are each localised around 60.0%, an important statistic given the hybrid leaning spec of the Cross. Toyota has been explicit that the market is sedan heavy today but will tilt toward subcompact SUVs over the next five to six years, mirroring global trends and underscored by used car data. In that arc of preference, the Cross is Toyota’s wedge – local, hybrid, and pitched squarely at buyers trading up from a sedan.
Pricing discipline – neither chasing share at any cost nor ceding ground to premiums – was the third piece. Gross margin at 15.0% and operating profit up 126.0%, evidence that Toyota defended profitability even as it lifted throughput.
Competition sharpened notably in pickups and SUVs. Management name checked new entrants such as JAC T9 and GWM Cannon, and acknowledged that Isuzu’s D Max and other Chinese models are intensifying the fight in double cab territory. Rather than retreat, Toyota pointed to market expansion: the overall pie is getting larger, and Toyota intends to keep its slice by improving efficiency and sustaining product freshness.
Even with strong demand in FY25, IMC is planning for a less forgiving FY26 if floods sap disposable income in affected districts. The company’s message is pragmatic: hold margins with operational efficiency, calibrate output to real time bookings, and resist a rush to discount that might undermine resale values – a key part of the Toyota proposition
in Pakistan.
A final note on policy and imports: management has been vocal about the risks of further used vehicle liberalisation. Extending the age limit to five years and allowing commercial imports, they argue, could unleash a wave of used CBUs that would undercut local assembly economics. The company says that if the ground rules change, it will adapt – even if that means pivoting toward imports. The subtext is clear: Toyota prefers to build here, but only under a policy framework that rewards building.
Ask any dealer principal and you will hear the same refrain: four variables dominate car buying behaviour in Pakistan – income visibility, interest rates, fuel economics, and product fashion. FY25 put all four on display, and Toyota’s numbers read like a case study in how they interact.
Income visibility matters most for first time buyers and for upgraders who stretch for a higher trim or body style. Toyota’s breadth across price bands meant it could harvest demand where income was less disrupted –urban salaried households for Yaris, fleet and government procurement for Corolla, and rural and construction linked buyers for Hilux. The company disclosed that institutional volumes are about 10.0% of sales, providing ballast when household budgets wobble. That mix helps explain why Toyota’s volumes rose 60.0% against a broader market up 40.0%. When some parts of the economy slowed, others stepped in.
Interest rates shape affordability directly through auto finance instalments. Much of FY25 was lived at high rates; easing came late. Toyota’s growth in that context suggests a high share of cash buyers in certain segments, and a product/brand proposition strong enough to keep conversion rates healthy even when monthly payments pinch. The company’s caution for FY26 – especially after the floods – is telling: if rates ease but incomes in affected districts sag, bookings can still slip. That is why management emphasises efficiency first, price action second.
Fuel economics are the quiet revolution beneath the bonnet. With petrol prices volatile and urban commutes lengthening, fuel efficient trims and hybrid options command a premium that buyers are increasingly willing to pay. Toyota’s bet here is the Corolla Cross, marketed with its hybrid credentials and a localisation level around 60.0% that helps contain sticker shock. The pitch is classic Toyota: pay more up front, spend less every month, and own a model with strong residuals. As the rupee and fuel prices move, that total cost of ownership story becomes more persuasive.
Product fashion is the fourth driver –and it is shifting. The company expects Paki-
stan to follow global patterns as subcompact SUVs become the default family car over the next five to six years. Used car imports already show the tilt; new car launch calendars will accelerate it. Toyota has both defensive and offensive pieces on the board: Yaris defends the sedan mainstream with a fresher face, Cross introduces hybrid SUV ownership at scale, and Hilux/Fortuner protect the higher end. If the SUV shift gathers pace, Toyota aims to be positioned to catch the wave rather than be caught by it.
Beyond these four, policy signals and supply frictions influence buyer psychology. Each announcement about used car rules triggers a pause as buyers decide whether to wait for more choice; each rumour of CKD part shortages nudges shoppers to book early to dodge delivery delays. FY25’s relative calm on supply – and Toyota’s ability to scale output – helped shorten queues, which, in turn, supported conversion and reduced the “own money” premium phenomenon that often mars the new car experience.
Finally, there is brand risk management – the promise that the vehicle will hold up, parts will be available, resale will be strong, and the company will stand behind the product. In a year of new entrants, those old fashioned virtues still mattered. Toyota’s consistency on warranty, service intervals and parts availability is part of the reason it could earn more while selling more; fewer surprises mean fewer discounts and a healthier used car halo, which loops back into new bookings.
By any measure that counts for investors – profit, dividend, margin or share – Toyota’s Pakistan business had a banner FY25. The company posted record earnings and the richest payout in its history even as rivals expanded line ups and used car imports loomed as a structural threat. It did so by leaning into a product pyramid that covers the mass market and the premium, by refreshing models with enough cadence to keep buyers engaged, and by defending profitability rather than chasing every marginal unit.
The task now is to hold the gains in a tougher operating environment. Floods will test demand. Policy may tilt towards used car liberalisation. Competition will keep sharpening, particularly in pickups and the subcompact SUV space that is set to define the next half decade of Pakistani motoring. Toyota has telegraphed its response: improve operational efficiency, stay close to consumer preference (especially the hybrid curious family buyer), and fight for a policy framework that rewards building over shipping.
FY25 proved that an incumbent can still set records in a noisier market. FY26 will show whether those records were a culmination – or a new floor. n
Bank of Punjab has been stable for a while. It took interim dividends for the market to notice
The bank is a long way from the major hole in its balance sheet that came from the 2008 financial crisis; it now believes it can predictably generate shareholder returns
FProfit Report
or years after the 2008 financial crisis, the Bank of Punjab (BOP) has quietly stitched together a sturdier balance sheet and a more predictable earnings engine. The market finally sat up when management crossed a psychological Rubicon: policy backed, recurring cash dividends – paid in year – and an explicit intent to make them a habit.
At its mid year results briefing, BOP announced its first ever interim cash dividend of Rs1.0 per share, a watershed for a bank listed since 1991 but historically conservative about mid year payouts. Management framed the step as the natural outcome of a more resilient capital position and a business mix that throws off steadier income. They emphasised that interim payouts would continue and that quarterly dividends are now a live option –subject to board approval and the cadence of profits. That is a marked cultural shift in how the lender majority-owned by the government of Punjab thinks about capital return.
The numbers supplied the confidence. Second quarter CY25 earnings climbed sharply – management highlighted an EPS near Rs1.5, up around 55% year on year and 175% quarter on quarter, taking 1HCY25 profit to Rs6.5 billion, up 38%. In parallel, deposit funding reached a record Rs1.9 trillion by June, up 23%
since the previous June, with a meaningful improvement in low cost deposits and current accounts now at 24% of the total. Those gains matter because they lower the bank’s cost of funds and make dividends easier to sustain.
Why did earnings step up at just this time? Roughly a quarter of the uplift in net interest income (NII) came from the removal of the minimum deposit rate floor for non individuals – a change in central bank policy that allowed banks to re price corporate and public sector deposits more flexibly from 1 January 2025. The remaining three quarters of the NII gain came from the hard yards of banking: cheaper mix (more current accounts), systematic term deposit repricing (with 64% of deposits repriced by June and 87% by August), and better yields on the loan book. Management’s maths suggests that as the last 13% of term deposits roll over, spreads can still inch higher. The backdrop for all of this was a rate cycle already edging down, which the bank believes could deliver a further 1.0–1.5 percentage points of cuts in the months ahead.
When banks promise recurring cash, valuation tends to follow. Sell side estimates place BOP at a forward price to book near 0.6 times for CY25–CY26, a discount to peers that drew attention once the bank paired earnings momentum with a payout blueprint. The stock has been hovering near its 52 week high in recent sessions – an implicit vote that a bank once known mainly for steadiness is now being
priced for repeatable shareholder returns.
There are, of course, guard rails. Management has adopted a formal dividend policy that keeps quarterly dividends as an aspiration, not a promise, and flags that each step will remain subject to board sign off and regulatory norms. That nuance is easy to miss in the excitement, but it is central to understanding BOP’s message: the bank is not becoming cavalier; it is translating long in the making stability into a predictable cash return framework.
The Bank of Punjab sits in a rare niche: a publicly listed, commercially run lender that is majority owned by the Government of Punjab and yet increasingly measured by private market metrics. Founded by provincial statute and listed in 1991, the bank has spent much of the past decade institutionalising processes around risk, funding and technology while using its public sector mandate to cultivate development finance muscles in small business and agriculture. That dual identity – mission heavy but market aware – has shaped its recent strategy. (Management itself framed the debut interim dividend as “first ever since listing,” a neat reminder of how long the bank has been on the market without adopting mid year payouts.)
The footprint is sizable and widening. Management told analysts it aims to take deposits to Rs2.0 trillion this year and Rs2.6 trillion over three years, supported by an optimisation push in branches and a targeted
build out of 100 outlets to take the network past the 1,000 branch milestone. The language is less about raw expansion, more about productivity of the network – getting more low cost liabilities from each branch, improving service quality, and powering digital channels that reduce the cost to serve.
Some of that service proposition is classic retail: current and savings accounts, term deposits, cards and digital wallets. Some is explicitly development oriented: farmer loans, SME working capital lines, and targeted schemes (for example low cost housing or solar) that flow through the bank’s public mandate. Even a quick scan of the bank’s product pages gives a feel for the breadth – from Kissan Dost agri finance to Apna Ghar housing, Apna Rozgar entrepreneurship support and Women on Wheels. Development in this context is not just about concessional rates; it is about building distribution where banks often fear to tread.
BOP’s Islamic conversion plan adds a third layer to the identity. Management says it has submitted a full conversion roadmap to the Punjab government and intends to complete the transition well before the December 2027 deadline, with both the board and executive team committed to the shift. In practice, that means product migrations, Shariah governance, changes in treasury operations and –perhaps most crucially – a steady replacement of conventional liabilities with Islamic funding. It is a complex, multi year pivot, but one that the bank insists will enhance funding depth and customer reach.
Strip away the headlines and you see a bank that has quietly re engineered its economics.
Deposits at Rs1.9 trillion (June) are not the only story; the mix is getting cheaper. Current accounts now form 24% of deposits and average low cost deposits are up 40%, with management targeting an industry like 33% mix within three years. In a world of easing rates, that is the right direction of travel: a higher current account share cushions NIMs as the asset side re prices down.
The net interest income engine is being tuned on both sides of the balance sheet. Management estimates that roughly 25% of recent NII growth came from the removal of the MDR (minimum deposit rate) for non individuals – a policy change the State Bank announced for 2025 that gave banks flexibility to negotiate corporate rates. The other 75% came from deposit mix gains, repricing of term deposits, and better loan yields. Because 87% of term deposits had re priced by August, with the rest due this year, management expects an incremental 4–5% uplift to spreads as the tail catches up. Put simply: the bank is earning more on assets while paying less, on average, for liabilities.
Credit quality is the other half of the com-
fort story. Total advances are about Rs770 billion, of which around one third is channeled to SMEs and agriculture – the very segments many banks under serve. Crucially, about three quarters of that SME/agri book carries first loss guarantees from provincial and federal programmes, sharply reducing the bank’s net risk. Management’s stress test framing was blunt: only about 0.4% of the entire loan book is potentially at risk, with just 8% of SME/ agri exposures in flood declared areas. That combination – development reach with credit protection – goes a long way in explaining why BOP has been able to talk dividends without investors panicking about asset quality.
The investment portfolio looks deliberately conservative for a bank in transition. Management describes a book tilted to floating rate PIBs at roughly 53–54%, T bills at 23–24%, and fixed PIBs at 17–18%. Durations are short – under two years for fixed PIBs and about 2.5 years for floating rate holdings – and the overall portfolio yield sits around 12%. In a rate cut cycle, that mix gives the treasury room to manage re investment risk while taking advantage of repricing.
On the income statement side, the transformation has been visible for a while. In CY24, EPS printed at about Rs4.1 (up from Rs3.5 a year earlier), with quarterly momentum carrying into 2QCY25 (EPS ~Rs1.5 versus Rs1.0 in the same quarter last year. Topline resilience – higher NII and stronger fee income – has outpaced operating expense growth, with profit before tax up 179% year on year in 2QCY25. That is not a one off blip: management insists the earnings uplift is structural, not purely cyclical.
The MDR shift deserves a footnote, because it has been easy to misread. By relaxing the deposit rate floor for non individuals (while retaining it for individuals), the central bank freed banks to renegotiate expensive institutional balances. For a deposit rich player with scale in public sector and corporate relationships, the change aids spreads – particularly when paired with a rising current account share. BOP’s management explicitly attributes about a quarter of NII gains to that policy –context that helps reconcile the step change in 2Q earnings with earlier quarters.
All of which loops back to dividends. A bank can only commit to recurring payout if three conditions hold: a funding base that gets cheaper or at least does not get more expensive; a loan book that grows without bleeding capital; and a treasury book that can absorb rate volatility. Management argues it has all three – and investors now have a live test. The interim dividend has been paid; quarterly dividends are no longer taboo; and the bank says the policy intent is to keep cash flowing in year, rather than stockpiling it for a single year
end declaration.
BOP’s recent story is also the story of its chief executive. Zafar Masud, appointed in April 2020, is well known beyond banking circles because he is one of two survivors of PIA Flight 8303, which crashed on final approach to Karachi on 22 May 2020. In the years since, he has spoken publicly – sometimes sparingly, sometimes at length – about the seconds between impact and escape, and about the obligation he felt in the aftermath. He also put the experience on paper this year in a book, Seat 1C, which reviewers have read as part memoir, part institutional critique.
The biographical arc matters because it colours how Masud talks about the bank’s purpose: development finance, inclusion, risk management that is rigorous without being paralysing. It also matters because leadership continuity has been a quiet constant at BOP during an era when many state linked institutions saw churn. Public profiles and official pages alike underscore that Masud remains at the helm, and press coverage has often spotlighted both his resilience and the changes underway at the bank on his watch.
None of that guarantees outcomes. But it does give texture to an institution trying to blend commercial returns with a development role. In recent interviews and commentaries, Masud has argued that the bank’s job is not simply to chase spreads but to build the markets it serves – SMEs, farmers, young households, digital users – so that spreads exist in the first place. That philosophy shows up in choices like first loss guaranteed lending to SMEs and agriculture: de risking where the state wants activity, while keeping the bank’s own capital safe. It also shows up in the decision to move towards quarterly dividends, which forces operating discipline and continuous communication with investors.
The Bank of Punjab did not become an investor darling overnight. It became noticeable when years of balance sheet tidying – cheaper deposits, more disciplined lending, a conservative treasury – unlocked a behaviour change: pay the owners, and pay them regularly. The first ever interim dividend and management’s stated ambition for quarterly cash mapped a new compact with the market, one grounded in a business that now looks both more efficient and more repeatable.
Look past the shiny newness of the payout and the same old work is doing the heavy lifting: building current accounts branch by branch, repricing liabilities, taking guaranteed risk in underserved segments, and keeping duration tight as rates fall. That is what “stability” has meant at BOP for a while. The difference now is that it finally shows up in investors’ bank accounts – quarter by quarter, if the board and the numbers agree. n
Profit Report
urree Brewery Company Ltd has posted the strongest year in its 165 year history, crossing the psychological mark of $100 million in annual
Murree Brewery CROSSES
$100 MILLION
IN REVENUE FOR THE FIRST TIME
Murree Brewery crosses $100 million in revenue for the first time Pakistan’s monopoly alcoholic beverages company grows its non-alcoholic product line despite a slowdown in consumer spending
revenue for the first time on the back of stronger volumes, selective price increases and firmer margins. The Rawalpindi based beverages maker reported net revenue of Rs28.6 billion for the year ended 30 June 2025, up 20.0% from Rs23.8 billion last year. Net profit rose 24.4% to Rs3.3 billion, as gross margins widened and finance income stayed elevated. Murree’s top line translates to roughly
$102 million, nudging the company over the nine figure threshold since Pakistan’s inflationary cycle began to reprice consumer goods in rupee terms.
The result is notable not merely for the absolute figure, but for where the growth came from at a time when households have been cautious with discretionary purchases. Murree expanded gross profit by 31.3%, to
Rs7.4 billion, lifting the gross margin to 25.8% from 23.6% a year ago. Operating profit rose 32.6% to Rs4.5 billion, with the operating margin improving to 15.9% from 14.4%. Net margin edged up to 11.4% from 11.0%. Management held selling and administrative costs in check relative to sales while benefitting from scale in manufacturing and distribution.
Shareholders will see that performance flow through to cash. The board has recommended a final cash dividend of Rs14.5 per share, on top of interim dividends already paid totalling Rs27.0 per share (270%). That brings the full year payout to Rs41.5 per share. Earnings per share climbed to Rs117.9 from Rs94.8 last year, an increase of 24.4%.
Put together, this was a year in which a heritage manufacturer leveraged brand strength, a broad beverage portfolio and distribution reach to grow faster than a tepid consumer spending backdrop would suggest. Pricing helped, but not as much as the arithmetic of scale: higher throughput reduced unit costs in both brewing and bottling, and a richer sales mix supported margin expansion.
Murree’s story begins long before the Pakistan Stock Exchange, the modern nation state, or even the railways knit the region together. The brewery was established in 1860 at Ghora Gali to serve British civil and military personnel in the hills near Murree. As the company grew, operations shifted largely to Rawalpindi in the early twentieth century;
the original hill property was eventually sold, and the Quetta distillery was destroyed in the 1935 earthquake. The tumult of Partition saw the Ghora Gali site burned in 1947, but the enterprise endured, passing into the hands of the Bhandara family, Parsis with a long association with the trade. Today Murree is one of the country’s oldest continuously operating industrial concerns.
Survival in Pakistan’s unique regulatory environment is its own case study. The 1977 prohibition on alcohol sales to Muslims forced a wholesale rethink. Over the decades, amendments and licensing processes created a small but formal market for non Muslims and certain establishments. That niche – combined with limited competition, brand loyalty, and the company’s ability to control quality from malt to bottle – allowed Murree not only to survive but to modernise.
The company lists on the PSX and operates factories in Rawalpindi and Hattar, supported by distribution offices in major cities. A third generation leadership team – Chairman Ch. Mueen Afzal and CEO Isphanyar M. Bhandara – has leaned into a dual identity: a brewer distiller with historic brands and a modern, fast moving consumer goods manufacturer with ambitions in non alcoholic drinks.
Murree organises its operations into three divisions:
• Liquor which, importantly, includes both
alcoholic and non alcoholic beverages (beer, PMFL and non alcoholic malt drinks);
• Tops juices, aerated soft drinks and mineral water;
• Glass bottles and jars, serving the company’s own needs and the wider market.
That structure is explicit in the company’s own financial notes and the PSX company profile. In other words, “Liquor” as a division is not entirely synonymous with “alcohol”.
About 55% of the company’s revenue in 2024 was alcoholic beverages, with its flagship brand Murree Beer accounting for just 19.3% of revenue. Most of the alcoholic beverage revenue comes from what the company calls Pakistan-made foreign liquor (PMFL), which refers to its spirits and hard liquor products such as brandy, vodka, rum, and whiskies.
At revenue level, the higher priced PMFL and beer skew the mix toward the Liquor division; by volume, however, the picture looks different. Distributors and company officials say about half of beverage units Murree sells are non alcoholic – a category spanning malt drinks, aerated soft drinks, juices and bottled water – while alcohol remains the profit engine because of price per litre and tax structure. (Murree does not publish unit level volumes by category in statutory filings.)
What is clear in the numbers and the marketing is the push into non alcoholic
brands. The company’s half year report showcased a new soft drink launch (“Bigg Orange”) and reiterated management’s view that stability in prices and the rupee would support volumes. In parallel, media reporting this year has highlighted the strategic emphasis on energy drinks, juices and malted beverages to capture Pakistan’s youth heavy demographic.
In terms of the portfolio, the flagship Murree Beer line and various PMFL products (whisky, vodka, gin) remain the backbone of the profit pool. (This is also the area most affected by regulatory controls on pricing, marketing and licensing.)
On the non alcoholic malt and soft drinks front, long running labels such as Malt 79 sit alongside a growing roster of juices and carbonates under the Tops umbrella. The company’s formal business description emphasises non alcoholic beer, aerated water, juices and mineral water as core activities.
The shift in balance is not merely tactical. It is a structural hedge. As the Associated Press observed this summer, Murree still operates in a heavily regulated alcohol market; non alcoholic beverages, while more competitive and lower margin, offer scale and visibility with a far broader consumer base. That logic – profit density from alcoholic SKUs, volume from non alcoholic – helps explain the margin pattern seen in FY25.
Murree’s strategy over the past two years has been remarkably consistent across its disclosures and public remarks: Widen the non alcoholic funnel. The company continues to seed SKUs that can win share in mass market channels – PET carbonates, juices and value malt drinks –while leveraging its cold chain and route to market learnt over decades. The February interim report literally front paged a new orange carbonate, a small but telling signal that product development is back at the centre of the playbook.
Keep the core premium, protect pricing power. Within alcoholic beverages, Murree has typically focused on quality and packaging to justify price points in a
market where formal competition is limited but informal alternatives exist. The trade off is clear: PMFL and beer deliver more rupees per litre but are constrained by licensing and taxes, while non alcoholic lines must hustle against global FMCG giants. External reporting this year captured the calculus: there may be “less money” in non alcoholic drinks per unit, but the segment is “more secure” and much bigger.
Navigate levies and local taxes. The interim directors’ review devoted space to the super tax – the FY25 amount was Rs283.4 million – and to court proceedings over water use charges set per litre by provincial legislation. The company also disclosed contributions to the national exchequer, underscoring the tax intensity of the category. These headwinds have not derailed the growth plan, but they make the case for non alcoholic expansion stronger.
Follow the demand map – Karachi first. Last year’s filings place Karachi as the single largest market, contributing on the order of one third of domestic revenue – more than all of Punjab combined. That concentration reflects both demography and distribution: a dense urban consumer base, the country’s most formalised retail channels, and an ecosystem of licensed outlets that simply does not exist at the same scale elsewhere.
The strategic implication is straightforward: the company wins the year if it wins Karachi, then layers on volume from the rest of Sindh and key urban centres in Punjab and Khyber Pakhtunkhwa.
What this mix means for FY26. If interest rates continue to ease and the rupee remains broadly stable, the company’s own outlook suggests it expects to “continue to achieve sale targets and volumes.” With EPS at Rs117.9, a full year dividend of Rs41.5 per share and capex largely focused on sustaining efficiency, Murree looks set to balance premium alcoholic profitability with scale from non alcoholic beverages, keeping margins resilient even if consumer spending growth remains soft.
The headline – crossing $100 million in revenue – matters for more than bragging rights. For investors, it is a marker that the company’s rupee denominated growth over the past two years has begun to convert into dollar scale sales despite an exchange rate that hovered in the high Rs270s to low Rs280s through much of the year. For the business, it validates a product portfolio strategy that avoids over reliance on a single category. And for the consumer economy, it is a reminder that even in a slow year for discretionary spend, brands with reach and trust can grow by balancing premium and mass market lines.
The arithmetic helps. Gross margin at 25.8% leaves headroom to absorb spikes in packaging and energy; an operating margin of 15.9% is respectable for a plant heavy beverages company. The counterweights are familiar: regulatory risk, sector specific levies, and the ever present FX pass through to inputs such as barley, packaging resins and glass where imports are involved. But relative to those risks, Murree’s FY25 set of accounts looks unusually tidy.
Murree has been many things in its long life – a hill station brewery, a wartime supplier, a distiller, a soft drinks maker, even a glass manufacturer. That plurality is now its edge. The Liquor division supplies the profit pool; Tops supplies reach and relevance in the weekly shop; Glass gives an industrial backbone that is partly hedged against commodity swings. Management’s decision to broaden non alcoholic SKUs is less a departure than a return to a familiar playbook of adaptation.
It is also, implicitly, a bet on urban Pakistan. In a country of young consumers and rising heat, cold non alcoholic drinks are a habit category. The half year “Big Orange” reveal was hardly a splashy launch by multinational standards, but it speaks to a locally tuned, iterative approach: use existing lines, sell through the network, repeat. If that approach can win share at the margin in Karachi – where Murree already dominates its formal niche – then the company’s FY25 numbers may prove to be a base rather than a peak. n
OPINION
Asif Saad
Do Pakistani business groups know how to diversify?
The question is not just whether major business groups in Pakistan know how to diversify. It also matters whether their diversification efforts have been good for them and for the country
As someone who has been part of the Pakistani business landscape for the last four decades, I have witnessed the evolution of local businesses from single business entities to diversified corporate groups. In this course, I have seen several of them often face a strategic choice: should they focus on growing their core business or diversify into new areas?
While the diversified conglomerate facades always seem to shine brighter, I have been curious about their chosen growth strategies and whether these have yielded optimal results for them and the country.
To explore this, I examined counterfactual scenarios for a few large Pakistani business groups. I imagined how they might
The writer is a strategy consultant who has previously worked at various C-level positions for national and multinational corporations
have evolved if they had focused on their core businesses rather than diversifying. This comparison of the actual path with a hypothetical focus strategy draws valuable lessons for the future.
But first, some theory!
While there is no one-size-fits-all strategy, commercial organisations would do well to focus on their core businesses if untapped market potential still exists and the core product or service has room for growth. This could involve expanding into new geographies and different customer segments to improve market share.
The core must remain in focus when you have a strong competitive advantage, unique capabilities, a brand, or cost advantage that can be scaled and expanding the core generates higher or more predictable returns compared to diversification.
Focus builds strength and avoids spreading resources too thin. It also deepens expertise inyour main business.
On the other hand, you would pursue diversification when the core market is saturated or stagnant, growth slows, margins compress, or customer needs shift. When concentration risk is high, there is overdependence on one product, customer group, or geography, which poses longterm risk.
You also need to have transferable capabilities, such as skills, technologies, or distribution channels, that can be leveraged in adjacent markets. Additionally, customer needs are evolving, and new problems your customers face can’t be solved with your current offering. Finally, you have the capital and management capacity to handle new ventures without weakening the core.
Management gurus would advise you that it is always better to focus on your core first, then diversify. Most successful companies exploit their core until marginal growth slows, then move into adjacencies (McKinsey’s ‘three horizons’ model). When you decide to diversify, it is always better to do related diversification first. Companies usually succeed when new areas are linked to existing strengths.
This brings us back to looking at some specific examples of the evolution of local Pakistani groups.
Let’s start with Nishat Group, which began as a textile company and later diversified into cement, power, banking, insurance, and automobiles. Counterfactually, if Nishat had concentrated on textiles, it could have become one of the largest integrated textile and apparel exporters in South Asia. They might have even scaled into global fashion retail, like Inditex (Zara) or Arvind (India). This approach could have hedged against local macro shocks through stronger export revenues.
Interestingly, Nishat pursued diversification into banking and energy, which provided steadier cash flows, even though the regulatory risk increased.
Engro Corporation started as a fertiliser company and later diversified into petrochemicals, energy, food, and telecom infrastructure. If Engro had doubled down on fertilisers and Agri-inputs, it could have become a regional agribusiness leader, exporting into South/Central Asia and Africa. They would have also had the potential to move up the value chain into Agri-tech, seeds, and biotechnology earlier.
Like Nishat, Engro diversified into energy for steadier cash flows but increased its regulatory exposure!
Packages Group, initially focused on paper and packaging, later diversified into consumer goods (Nestle Pakistan JV) and financial services. If Packages had expanded globally, it could have become a regional packaging giant, entering GCC, Central Asia, and Africa. This expansion might have also led to the development of a ‘Tetra Pak–like’ multinational from Pakistan.
However, the company could not scale regionally and therefore decided to grow in banking and insurance for steady cash flows.
While I cannot provide this analysis for other local groups in this space, they have likely followed similar trajectories.
For comparison, though, it is interesting
to examine Indian groups like Reliance, Tata, and Mahindra. Their growth paths suggest that Indian groups tend to diversify earlier and more aggressively due to larger markets and deeper capital pools. In addition, successful market reforms have provided strong tailwinds to domestic opportunities.
In contrast, Pakistani groups diversify later and incrementally, constrained by financing, market size, and governance style. Diversification in Pakistan often occurs reactively, responding to regulatory changes such as privatisation.
The upside of focusing on the core would have been the potential for the above-mentioned Pakistani firms to establish globally competitive champions in sectors such as textiles, agribusiness, and packaging. Every rupee invested outside the core was a rupee not invested in scaling exports or global positioning.
The downside of focus would have been the risk of stagnation during downturns without diversification buffers. Currency shocks, political instability, and the energy crisis made single-sector bets risky, necessitating diversification as a hedge against shocks in any one industry.
The bottom line for Pakistani groups is that diversification ensured survival and steady profits, but it also capped their global scale ambitions. For most family groups, the
goal was never to build scale businesses but to preserve wealth and stability across generations. Diversification achieved this better than pure focus.
In essence, Indian groups diversified to seize opportunities, while Pakistani groups diversified to manage risk.
For the next generation of Pakistani business leaders, the above analysis points to certain key lessons.
1. Instead of only managing risk, Pakistani groups should pursue growth opportunities and move early into closely related adjacencies where they can leverage existing assets and capabilities.
2. Build institutional depth early. Diversification is harder when governance remains fully family-centric. Pakistani groups need to professionalise boards, finance, and strategic management early, so they are structurally ready for opportunities.
3. Think regional, not just domestic. Given the country’s relatively smaller market size, local groups should look at regional adjacencies (Middle East, Central Asia, Africa, etc.) earlier in their journey. Cross-border expansion can substitute for a limited domestic scale.
4. Think first about scaling the strongest core businesses internationally.
5. Over-diversifying domestically will make you a small international/regional player in a number of markets. n
By Zain Naeem
It might come as a surprise to many outside Punjab but Bunny’s and its mustachioed logo has a long established name and recognition in the land of the five rivers. The company,
Will Bunny’s rise?
The bread maker has seen consistent profits. They are now left with the business of managing their financing as they embark on expansion.
established in early 1980s, has grown over time and is now expanding its own footprint further in the province. While that takes place, the stock price of the company has increased by almost ten folds in the last 6 months. In March 2025, the stock was trading at Rs 15 which touched a high of Rs 154 in August and is persisting at those levels
currently.
Bunny’s has shown a track record of consistent profits and earnings in its past which does bode well for its market price. However, questions do get raised as to why the price increase has increased suddenly when the company has been earning profits long into its past. Is there justification for
the price increase or will this prove to be a blip? Profit looks to delve deeper into the financials of the company and project how the future looks for the bread manufacturer.
The history of the company
Bunny’s was the idea of Younus and Haroon Shaifq Choudhry who were involved in the construction and trading business in the Middle East in the 1970s. Once the brothers decided to come back home, they established a bread manufacturing company in Lahore with the help of National Development Finance Corporation (NDFC). With capital of just Rs 14 lakhs, the company was established and commenced production of binds, cakes, bread and rusks with a facility consisting of four ovens. From the very beginning the principle at the heart of Bunny’s was to grow and expand its size, product line and production capacity. Over time, Bunny’s became the main player in Punjab with Vita, Dawn and Wonder bread being its primary competitors.
Over a journey of more than 40 years, the impact of the company can be gauged by the fleet of vans that are seen all over the province delivering freshly made bread and bread products to shops and retailers every morning. After the passing of Younus Shafiq, Omar Shafiq has managed to take over and help the company move forward. As the second generation becomes involved at the company, more and more family members have started to take a bigger role in the progress and success at Bunny’s.
Growth has been at the core of the company as it has looked to constantly build on its production capacity. By 2008,
Bunny’s was able to boast of revenues being valued in excess of Rs 1 billion which was a vote of approval for the expansion that had been carried out in 2006. This was further supported by the fact that the bread manufacturer became the top seller in the city of Lahore alone. In order to sustain the growth story of the company, it was decided to merge Bunny’s with Moonlite which was a company involved in Woolen Yarn.
The function of the merger was to integrate the assets of Moonlite into Bunny’s and avail the listing status of Moonlite. By 2017, institutional investors like National Bank of Pakistan, Awwal Modarba and Pak Brunei were sold a stake in the company through private placements. All these factors pointed towards the fact that investors, both large and small, were willing to invest in Bunny’s and considered the prospects to be bright for the company.
The merger helps Bunny’s get listed
Rather than going for its own Initial Placement Offer, the management at Bunny’s decided to merge with a listed company and utilize the listing status of Moonlite itself. Moonlite used to be a company which had been incorporated in 1964 and became listed in 1970. It used to be involved in the manufacturing of woolen yarn with its factory established in Balouchistan.
The historical performance at Moonlite shows that in 2003, the company had earnings revenues of around Rs 23.9 crores which steadily fell to only Rs 10.5 crores in 2009. Moonlite kept fluctuating between profits and losses until it was decided to close down production for good in 2014. This led to liquidation of the company and valuation of its assets and liabilities being carried out.
As uncertainty and heavy losses became a mainstay, the operations were formally closed in March of 2014. This followed the decision by the board of Moonlite to voluntarily wind up its operations which was approved by the shareholders. As the assets of the company started to be stripped off, buyers were found who were willing to buy the equipment. Once the fixed assets were removed from the balance sheet, the assets held by the company were worth Rs 45 lakhs with trade payables of worth Rs 11 lakhs. The trade payables were being used in order to plug the gap that was left gaping due to the financial losses.
This was a perfect opportunity for another company to takeover Moonlite with negative equity as the listing status was up for grabs. This is where Bunny’s decided to swoop in and merge itself with Moonlite. Moonlite had to issue additional shares of
Moonlite to the shareholders of Bunny’s in order to comply with the merger requirements. After the merger had been carried out, Bunny’s had a new complication that needed to be addressed.
Since Moonlite had closed down its operations, the shares of the company had been suspended from trading at the exchange. Before the listing status of Moonlite could be utilized, certain non-compliances had to be addressed before trading could be resumed on the shares. By 2020, the company had looked to address all these non-compliances and the shares started to trade on the market in August of 2020.
Moonlite becomes Bunny’s
After the merger had been carried out, it seemed like Bunny’s was ready to become the next big thing. By 2020, the bread and bread related products accounted for 90% of its topline. The installed capacity of the plant stood at 111.6 million units per annum. The snack division of the company had also started to gain ground as it made up 10% of the revenues and there was an aim to target different segments of the market in order to increase these revenues.
The main competitor for Bunny’s was seen to be Dawn which held 40% of the market share in comparison to 15% held by Bunny’s. In Punjab, these positions were flipped as Bunny’s held a market share of 35% compared to 25% of Dawn. Even as it led the provincial market to such an extent, the strategy of the company was to keep dominating the market further. It had set into motion an expansion of capacity by adding new bun production lines in Lahore which would require a capital expenditure of Rs 300
million followed by new bread making line in Islamabad in 2023 and 2024 which would cost Rs 40 crores to Rs 60 crores in additional capital expenditure.
In addition to that, there was a tracking system which was put into place which would track the supplies across the region and the management wanted to further venture into areas inside Punjab.
One of the biggest advantages that Bunny’s has is the fact that its demand has become income inelastic. Due to the role bread plays in the everyday life of its customers, any price change is absorbed by the customer as they can not without their daily bread. As a result of this, Bunny’s is able to transfer much of its cost increases to its customers which allows them to cover any cost increase that takes place. This is recognised by the company itself, however, due to competition from other brands and regulation on price, this increase has to be justified to a certain extent.
Financial performance
Since the merger was carried out, Bunny’s became mandated to file their annual accounts which can be traced back to 2018. In 2017, the revenues of Bunny’s were worth Rs 2 billion which reached Rs 7 billion in 2024. This was the first time that the Rs 7 billion threshold had ever been achieved. The rise in revenues could not be matched by a similar rise in profitability as in 2017 the earnings per share were around Rs 2.67 per share. From 2017 to 2023, the earnings stayed around the Rs 2 mark. The worst year that was experienced by the company was 2024 when the company saw its first loss since 2018. Bunny’s suffered a loss per share of Rs 1.62. So what was the reason for the sudden decrease?
Based on the financial analysis, it can be seen that the margins shrunk for the company leading to losses being made. In 2017, the gross margin for Bunny’s was 27.5% which stayed at around 24% in 2023. In 2024, the margin shrank to only 20% which was due to higher raw material cost that the company suffered from. From 2023 to 2024, sales grew by 23%. In comparison to this, the cost of sales increased by 29% which shows that the cost of manufacturing the bread increased into the gross profit of the company.
From 2017 to 2024, the other expenses stayed constant which meant that as the gross margin shrunk in 2024, the net profit margin suffered and became -1.5%. This was due to the fact that the other expenses were seen to be 22% of the sales and once gross margin fell to 20%, the net margin ended up going into the negative region.
The most recent quarterly results show that things have started to get better for the company yet again. In the recent nine months,
the revenues have come to around Rs 5.5 billion which were Rs 5.25 billion for the same period last year. This shows that revenues for this year can be expected to be more than Rs 7 billion yet again. This would be the best year yet for the company based on its sales. One of the biggest changes has been that gross margin has yet again breached the 25% mark which shows that profitability will be expected to improve.
With improving top line and gross margin, the company has been able to triple its operating profit from Rs 11.6 crores to Rs 35.6 crores in the recent results. This equates to operating margin almost doubling from 3.5% to 6.5% in the current year. With decreasing interest rates and little in the provision for workers welfare fund, Bunny’s has seen negative other operating expenses, increasing other income and falling finance cost. Due to all these factors combining, the earning per share has gone from Rs -1.59 last year to Rs 2.24 this year. Even with triple the tax expenses, the bottom line has considerably improved.
The hole in the middle
One area that Bunny’s needs to focus on is its use of finance lease in the short and long term which allows it to carry out production. The company is depending on long term leases, short term leases and short term borrowings in order to finance its working capital cycle. To some extent, this is out of the control of the company as well.
Bunny’s has to provide the products to the retailers and then extend a credit line to them which takes them time to repay back for the products they have sold. As the lead time in recovering these amounts exists, Bunny’s has to keep increasing their trade debts as its sales increase.
On the other hand, they have to pay off their creditors in due time in order to make sure they have a constant supply of raw materials that it can use to manufacture its products. This creates an imbalance where payments are being recovered slowly while creditors have to be paid off within a time limit.
Two further complications are then added to this structure. On the one hand, Bunny’s has to pay back their leases and short term loans on a regular basis while its drive to carry out capital expenditure means that cash earned by the company has to be used in order to finance these investments. The results of all these matters is that cash and cash equivalents of the company end up being negative. In 2019, these stood at Rs -128 million which has kept increasing and stood at Rs -720 million in 2024.
The solution utilized by the company is to take out short term borrowings which
is used to finance any working capital needs. Usually, this would have been an appropriate solution. This solution became a problem when interest rates started to rise and touched an all time high throughout 2024.
To put this into context, in 2017, Bunny’s financing costs were 1.8% of its sales. By 2024, this had jumped to 3.9%. This means that even though sales increased by 221% from 2017 to 2024, finance cost increased by 593%. In the face of rising interest rates and costs, there was going to be a hit on the profits which became evident in 2024. As interest rates are on a downward trend, it can be expected that these costs will decrease going forward.
Another issue that Bunny’s has seen is that many of its long term leases are nearing the end and these leases are going from long term leases to short term leases. In 2017, around 62% of finance cost was made up of markup on long term leases. In the most recent year, this ratio has fallen to 29% while markup on short term leases has gone from 26% to 62%.
Long term leases are cheaper in terms of the interest rate charged compared to short term leases which are flexible but costly. As the mix between the two leases changes, Bunny’s is paying a higher cost when they can reduce these costs with long term leases. This can further improve the profit potential at the company.
Is the market price justified?
In terms of the financial performance, it can be seen that it has improved considerably over the last year. The recent results show that the company has been able to prove the loss made last year as an outlier and has brought its performance in line with its past. Once it is considered that the expansion into
Islamabad and increasing outreach further into Punjab, there is a potential that the bottom line for Bunny’s can keep improving.
But has the market overreacted to the potential?
As already stated, Bunny’s has seen its share price increase by around ten folds from Rs 15 in March of 2025 to August of 2025. The price is still persisting at these levels for the time being Based on that price, the price to earnings multiple comes to more than 50 based on Rs 3 being earned this year. Such a large multiple shows that the market is overvaluing the shares to a huge extent. Even with a book value of Rs 30, the market is expecting future earnings to be worth Rs 120 per share.
Now add to this the fact that the country is being ravaged by a disastrous flood which is expected to impact the wheat produce that will be seen in the next few months. As the damage of these floods is still being evaluated, it can be expected that wheat prices will rise in the coming months. Bunny’s already saw climbing raw material costs in 2024 and it can be expected that the first quarter ending September 2026 will start to see effects on the company’s profits.
With the company themselves stating that they expect margins to fall by 1% to 2%, it is clear that the bottom line will see an impact in the coming few days. Even with an inelastic demand, it has to be considered that the price of bread is regulated which can bring a lag between costs increasing and the subsequent increase in price.
For now, it seems that the inevitable decrease in profits are not being foreseen by the market. The plans to expand production, install alternative energy sources and venture into new markets can be expected to be positive, however, they need to be tapered with the reality of the floods and expected increase in wheat prices in the future. n
Govt says influencer who thinks Moon is centre of solar system should’ve distinguished between betting on derivatives and betting through gambling apps
By Profit
The Federal Investigation Agency (FIA)’s Financial White Crimes Division and the Securities and Exchange Commission of Pakistan (SECP), in a joint press conference have maintained that yes, local social media influencers should be able to tell the difference between gambling through the international financial derivatives market and straightup gambling on “finance”-sounding symbols appearing on the screen of your phone.
“No, we do not care if Rajab Butt was seen in a video pointing out the sun to his nephew on a model of the solar system and saying it was the moon,” said DIG Mazhar Abbas, Director of the FIA’s financial crime division. “That is still no excuse for him not to be able to tell the difference between these two different, but in essence, similar things.”
“Yes, I do mean that this chimp, as you call him,” said Abbas, in response to a question about Saad-ur-Rehman aka “Ducky Bhai” not having the cognitive skills to evaluate differences between financial products and platforms. “This guy should have known better.”
“Ignorance of the law is no excuse for breaking the law,” he said. “They should have known what I didn’t right before I was posted to this position when I was RPO Hazara Division.”
