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CONTENTS

10 Tread with caution on the Khaadi IPO 16 Speaking the truth Muhammad Azfar Ahsan 19 Hum Network profits fall 78% as Pakistan’s television advertising industry struggles

22 Who is buying a quarter of Asia Insurance? 24 TPL REIT partners with Saima Builders for Karachi waterfront project

The missing water account Mohsin Leghari

Can Pakistan develop its bee economy?

CCP clears Fatima Fertilizer’s Agritech share acquisition

Can the new auto-policy pass its road test?

26 Quantum Data Technologies has big plans. They start with cleaning up its past.

28 Next Capital profits surge in 2026, but its most exciting business may be Finqalab 30 Organic Meat Company’s revenues decline as dependence on UAE market remains a concern

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By Farooq Tirmizi

T An iconic brand, a story to fall in love with: Khaadi offers investors much to be excited about. But perhaps most importantly, it will offer a lesson in the difference between a good company and a good stock.

he Khaadi IPO prospectus is one of the most anticipated offerings in Pakistani capital markets in decades, with investors salivating at the prospect of buying into the growth of one of Pakistan’s most iconic brands. Their hopes are likely to be dashed. The prospectus tells the story of the brand, yes, but it is also where textile seth intercompany shell game shenanigans meet the financial illiteracy of a marketing graduate. Let us face it: Khaadi is a story you want to believe in. An upper middle class young man goes to a design school where he meets his future wife, and together the couple build a company that now has retail outlets on three continents, transformed the very nature of retail in Pakistan, and is probably the best shot Pakistan has at building a global brand. And Khaadi also carries with it certain signifiers of trustworthiness. The International Finance Corporation, a subsidiary of the World Bank, is an investor, as is Habib Bank and a handful of other credible investors. Then there is its board of directors, which has an independent chairman in the form of Asif Peer, CEO of Systems Ltd, one of Pakistan’s most admired technology services companies, and includes other well-respected names like Samad Dawood of Engro Holdings. It hired the global consulting giant McKinsey & Company to help improve its corporate governance, and insiders at the company say that it really did have a positive impact on the efficiency and efficacy of their systems. There is a lot to like about this company, and there is a lot to admire about the story of the gumption that it took on the part of Shamoon Sultan and his wife Saira to get the company to this point. But more than anything else, Khaadi’s IPO will introduce Pakistani investors to the difference between a good company,

and a good stock. The two often overlap, but they do occasionally diverge, and if one is to evaluate what the Khaadi IPO means for investors and for the Pakistani capital markets at large, that possibility must be kept in mind. Because here is the most of important fact about the Khaadi IPO: it is an IPO of only a part of the company, and the structure of the transaction is designed to raise capital from public investors against that one part of the company – and the public perception of its overall strong brand – while ensuring that the current owners minimize their risks, but continue to participate with their new minority co-investors in the all of the upside. But before we get into that question of structure, let us first revisit what makes this company one that captures the imagination of the Pakistani public.

The rise of Khaadi

haadi began a small store on the corner of a narrow street in Karachi’s Zamzama commercial area in December 1999 (the company started in 1998, but the store launch came a year later). Its founder, Shamoon Sultan, is the son of a Karachi entrepreneur who owns NutriCo Pakistan (Pvt) Ltd [formerly Unibrands (Pvt) Ltd], the sole distributor and marketer of Morinaga, a Japanese infant milk formula manufacturer. Founded in 1917 and introduced in 1979 to the Pakistani consumers, Morinaga is one of the most popular infant milk brands in Pakistan today. They now have a joint venture with Lucky Core Industries (formerly ICI Pakistan) to produce 12,000 tons of the product in Pakistan. Shamoon is also the nephew of legendary Chicago-trained architects Arshad and Shahid Abdulla. In 1990, the two brothers, along with several other prominent citizens of Karachi, set-up the Indus Valley School (IVS) of Art and Architecture in Karachi by moving the iconic

COVER STORY

100-year-old Nusserwanjee building from its old site in Kharadar, part of the historic older part of the city, to the new campus being built in Clifton, then still a newer neighbourhood closer to the beach. Three years later, in 1993, a young Shamoon, enrolled as a student at IVS, a decision that would change his life forever. His teachers from that era remember him as a bright student who was somewhat of a slacker, though he began working hard towards the end of his time at IVS and did particularly well on his thesis, landing a job with designer Noorjehan Bilgrami as a result. Indus Valley was a critical time in Shamoon’s life, and he remembers it with fondness and remains even now an actively involved alum. This is perhaps not surprising. IVS gave him his two great loves: Khaadi, and his wife Saira. He acquired a passion for weaving cloth during his time as a student at IVS, and it was a trip to India during his time at IVS that first planted the seeds of the idea for Khaadi in his mind. And he met Saira at IVS, where she was also a student, two years his junior. In early 1998, Shamoon decided to set off on his own and use his family’s considerable resources to bear to set up his own business. He was determined to create a retail brand for hand-woven khaddar clothing. He started off with Rs3 million in the capital, granted to him by his family. He acquired handlooms and set them up at a factory his family owned in the SITE industrial area in Karachi and set up a shop in Karachi’s Zamzama commercial district, also on a property owned by his family. His early operating costs were reduced by the fact that his father did not charge him rent on the first Zamzama shop. He then hired his first designer: Saira. From there began a journey of expansion, the likes of which Pakistan’s nascent retail sector had not yet seen. Shamoon and Saira

initially underestimated the speed with which consumers would buy their products, selling out in a matter of days and having to close down their shop until they could restock it. While Khaadi clearly started as a passion project focused on selling khaddar clothing, it did not stay that way for long. Shamoon and Saira may have an artistic passion for the products they create, but they are clearly commercially focused as well, launching women’s clothing lines, pret, and lawn. The company sells both readymade garments and unstitched fabric. The company began expanding its presence, first within Karachi, then on to Lahore and Islamabad, followed by eight other cities across Pakistan. By 2010, Khaadi felt confident enough to make its first foray into international retail, setting up in Dubai, followed quickly by a store in Abu Dhabi. In 2013, Khaadi began opening stores in the UK. The company’s retail footprint in terms of number of outlets peak in the year 2020 at 62, though nearly all of these were smaller, traditional retail outlets. The following year, the company embarked on an experiment that has since transformed Pakistani retail: the experience store at Dolmen Mall Clifton in Karachi, which was unlike any other retail outlet in the country, but would be familiar to anyone who has shopped at the H&M flagship store at Times Square in Manhattan.

The “experience store” pivot

ince then, the company has made a hard pivot: closing down its extensive network of smaller, traditional retail outlets and investing heavily in building out larger experience stores, an experiment now made possible with the advent of more suburban American-style malls sprouting up

across Pakistan, particularly in Karachi, Lahore, Islamabad, and Faisalabad. In cities where the commercial real estate did not support such a model, the company has invested in building out the physical space it wants for itself. The IPO prospectus lays out this strategy further: the company has 31 stores now, half of its peak in terms of the number of stores. But that number belies the fact that 18 of those are experience stores, and by 2028, the company intends for its entire physical retail network to consist solely of experience stores. This is reflected in the increase in square footage covered by those retail outlets, from 421,000 square feet in 2023, at an average of just over 10,000 square feet per store to a projected 783,000 square feet by 2028, or about 25,200 square feet per store. The premise of the strategy is that the growth in sales is likely to come from fewer stores that can serve as a draw for people to come and visit and see the company’s wares personally while moving a growing proportion of their shopping online. For example, a customer may come in a few times to a large experience store to try on a few items, figure out their “Khaadi size” and then feel comfortable ordering other products online, knowing that they have tested what will fit. But more than that, the store itself is one big, permanent, physical ad for the brand. For a company that had Rs28.8 billion in revenue for the 12 months ending June 30, 2026, it spends a remarkably small amount on marketing. Based on Profit’s analysis, we estimate the company spends maybe 0.3% of its revenue on marketing, which is remarkably low for a consumer-facing company. So the company is shrinking its physical footprint in terms of number of locations, but making each store an immersive marketing and sales experience, which it then hopes to

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capitalize on through e-commerce. And on that front, the company has already had some success, though progress has been somewhat slow. Gross e-commerce revenue is up to Rs3.3 billion, or about 8.7% of revenue, for the 12 months ending June 30, 2026, up from 8.3% in 2024.

The market shift

art of what Khaadi has been able to capitalize on is the sea change in how Pakistanis buy clothes. When the company was starting out, ready-made clothes constituted a tiny fraction of the overall market. In 2002, about 13% of the market for

clothes in Pakistan was for readymake clothes, with the remainder being for unstitched cloth and tailoring services. Clothes shopping in Pakistan in the late 1990s and well into the 2000s meant going to a market to buy cloth, then going to a tailor to get them stitched. This market still exists, of course, and is still the majority of spending on clothes in Pakistan, but 42% of the money spent on clothes in Pakistan – about $3.1 billion in 2025, according to Profit’s analysis of data from the Pakistan Bureau of Statistics – was spent on readymade clothing, where Khaadi has started to become a market leader. It is also, by far, the fastest growing part

of the market, having grown at an average annual rate of 12.3% per year – in US dollars – since 2002. Khaadi, in other words, is on the bleeding edge of where the market is headed, which makes it a uniquely attractive asset, and one that the market has been salivating at the prospect of a public listing for since at least 2011, when rumours first circulated that the company might be thinking about it. Indeed, in 2017, Profit did a story about such a prospect and imagined that the company may soon hit $1 billion in valuation as a result of its then high growth trajectory. That does not appear to be the case. At

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the top end of the valuation range presented in the IPO prospectus, the company’s valuation will be about Rs45 billion, or about $161 million.

The growth slowdown

adly, Khaadi has encountered the same ceiling that many other consumer-facing companies in Pakistan face: there is a small upper middle class that can afford their products, and to grow beyond that requires investment that often is very hard to recover because you have to build more infrastructure to get to a market where both the ticket sizes and price sensitivity – and therefore gross margins – are thinner than for serving the lower income end of the spectrum. When we last covered them in depth in 2017, Khaadi had just closed out 2016 at a little over Rs16 billion and was targeting Rs50 billion over the next decade. Well, it is now a decade later, and the company has hit Rs28.8 billion in revenue, which translates to an average growth rate of about 6% per year over the past 10 years. Inflation during that time has been 10.8% per year. Yes, Khaadi has actually shrunk in inflation-adjusted terms over the past 10 years, largely because, according to sources familiar with the company’s finances, the company has barely grown at all over the past 5 years. The company grew from Rs16 billion in 2016 to Rs25 billion in 2021, which is a more respectable 9.3% growth over five years, but since then has basically not really grown. Even now, the company’s revenue number for 2026 includes a line for export sales to its foreign affiliate companies that was not visible in the 2025 financial statements. It is possible that the 2025 number includes those export sales, but it seems a bit more likely that the export sales were moved to the Khaadi entity about to be publicly listed entity in order to boost its financial prospects and attractive-

ness for its IPO. Even on the e-commerce front, Khaadi has been able to grow its gross revenues from e-commerce, but its net revenue is actually declining. Net revenue is revenue after sales tax and discounts, and while some of that is due to higher sales taxes on e-commerce sales in 2026, a portion of this appears to be due to higher discounts to drive more sales. In other words, we may have a case of zero growth being dressed up to look like some measure of respectable growth.

The Sethia ‘tunnelling’ problem

ere is the statistic that matters the most for this IPO: out of every Rs100 that comes into Khaadi, the publicly listed entity, about Rs54 goes to companies that are owned by the Khaadi owners or their close family members, but are not part of the public listing, even though most of them form a part of the group that together can be described as the business the public knows as Khaadi. What is being put up for an initial public offering is not the holding company that owns all Khaadi businesses, but rather the specific business that runs the stores and e-commerce business, and some wholesale sales to its foreign physical retail stores and ex-Pakistan e-commerce operation. A company called Texmark (Pvt) Ltd – owned by a “close relative” – is the single largest supplier of stitched clothing, accounting for 55% of the cost of goods sold. This would be the equivalent of 40.5% of revenue. Other companies that are part of the group take another 0.6% of Khaadi revenue for other goods and services bought. Then about 6.5% of revenue is paid out to the property management company that owns many of the stores, and unlike most rental contracts, it extracts rents as a percentage of revenue, not a fixed monthly or annual

rent. And another 5.1% of revenue is paid to the holding company – Weaves Corporation Ltd – which is the ultimate parent company of the whole group, but not the entity that is being publicly listed. Here is why this matters: when a family controls so much of the cash flows of a company, the risks for minority investors are asymmetric. Think about what happens if the company faces a downturn in revenue or a squeeze on its ability to charge the prices it wants to. Will it try to negotiate lower rates with the suppliers and landlords where the owners and their family own 100% of the profits in order to share 20% of the profits it would park in the publicly listed company, or would it keep most of the profits in the private company, and let the effects of weak market conditions be borne by the public company’s minority investors? The answer to this is obvious, and this kind of interlocking set of relationships between companies owned by a single family is called tunnelling. It allows insiders to protect their interests at the expense of public market investors. There is no other purpose this kind of arrangement serves. So why does the Securities and Exchanges Commission of Pakistan (SECP) allow it? Because they know Pakistani seths, including people like Shamoon Sultan, are control freaks who will never really want to share in their profits, but the SECP believes that by enforcing strict disclosure rules – like the ones that allowed us to see how Khaadi really operates – will still allow the companies generating economic value to be accessible to public investors, and perhaps in time more of their profits will be available to them as well. But that does mean that if you invest in Khaadi, you should know that the structure of the company being offered ensures that you, the public investors, will bear losses or slowdowns in revenue growth before Shamoon and Saira and their family will. Are those the kind of people you want to do business with? n

COVER STORY

Speaking the truth By Muhammad Azfar Ahsan

akistan has demonstrated that it can command attention on the global stage through defense and diplomacy. The more consequential question, however, is whether it can translate that recognition into prosperity at home. Strategic relevance can create opportunities, strengthen international relationships, and expand a nation’s room for maneuver. But it cannot, by itself, put food on every family’s table, create productive jobs, raise real incomes, or equip the next generation with the capabilities to compete. The true measure of national success lies not merely in how a country is perceived abroad, but in how effectively it transforms its strategic advantages into a better life for its people. For some time, I have emphasized the framework of the three Ds: Defense, Diplomacy, and Development. Pakistan has demonstrated its capabilities in the first two, but the third remains our most consequential unfinished task. Defense safeguards sovereignty; diplomacy creates strategic space; development determines what a nation ultimately makes of both. Without a productive economy, capable institutions, and sustained investment in human potential, even the most significant strategic achievements may leave bigger opportunities unutilized. International recognition may elevate a country’s standing, but only domestic progress can give that standing lasting economic and social meaning. This is where Pakistan must confront an uncomfortable truth: we cannot build a stronger nation by celebrating what we have achieved while avoiding an honest reckoning with what we have failed to deliver. National confidence must rest on evidence, not perception; leadership must be measured by outcomes, not declarations; and patriotism must leave room for the questions that power would rather not hear. A country that mistakes criticism for disloyalty risks turning its greatest weaknesses into its most persistent blind spots. The distance between the story a nation tells about itself and the reality its citizens experience is not merely a problem of perception. It is a test of governance, institutional credibility, and the willingness to change course before missed opportunities become lasting national costs. The World Bank’s findings expose this disconnect. Its latest country data puts Pakistan’s national poverty rate at approximately 29 percent in 2024/25, compared with 22 percent in 2018/19, leaving around 70 million people below the national poverty line. Real wages declined by an average of 3.4 percent annually over the same period, while more than half the increase in poverty reflected a worsening distribution of consumption. These figures point to a fundamental weakness: economic stabilization is not translating into adequate improvements in household welfare. Restoring stability is necessary, but recovery must ultimately be judged by whether it improves people’s lives. The circumstances behind this deterioration cannot be ignored. The World Bank identifies the combined effects of the COVID-19 pandemic, inflation, devastating floods, and macroeconomic stress, alongside the limitations of a consumption-driven growth model. These shocks were real, but they raise a more consequential question: Why does Pakistan remain so vulnerable to repeated crises, and why does recovery so often fail to produce durable improvements in living stan-

dards? External pressures can explain economic setbacks. They cannot indefinitely explain the absence of structural transformation. The employment and human-capital picture makes the challenge even more urgent. Approximately 3.5 million people enter Pakistan’s workforce annually, while job creation remains inadequate. Most of the 17.7 million net new jobs recorded since 2018 have been informal, low-paid, or self-employed. Labor productivity grew by only 0.4 percent annually between 2014 and 2024. Meanwhile, nearly 40 percent of children under five suffer from stunting, one-quarter of primary-school-aged children are out of school, and 75 percent of children attending primary school cannot read and understand a simple story by the end of the primary cycle. These are not separate social concerns. They are constraints on productivity, competitiveness, and the capabilities of future generations. A country that underinvests in its people ultimately limits its own economic potential. Fiscal discipline, exchange-rate stability, financial credibility, and access to external financing remain essential to recovery. Yet these are means and not measures of ultimate success. A stable currency cannot compensate indefinitely for declining purchasing power. A rising stock market cannot establish whether economic gains are reaching the wider population. Loans and debt rollovers can relieve immediate pressure, but they cannot replace competitive industries, expanding exports, or structural reform. Stabilization creates the opportunity to change direction; development determines whether that opportunity produces lasting national strength.

A closing-bell ceremony at the Karachi Stock Exchange in 2010. Pakistan’s capital markets have seen many eras throughout the country’s tumultuous economic history. Market gains alone do not show whether recovery is reaching households. Having worked at the intersection of investment, business, and public policy, I believe Pakistan’s investment challenge cannot be resolved through promotional campaigns or announcements alone. Investors need predictable policies, consistent regulations, enforceable contracts, and institutions capable of honoring their commitments. Existing investors must be facilitated, regulatory uncertainty reduced, and

productive capital encouraged to generate exports, transfer technology, develop skills, and create decent employment. The value of investment lies not simply in the capital it brings, but in the productive capacity it creates. Confidence is earned through institutional credibility and execution, not through rhetoric. The governance deficit beneath these weaknesses deserves equal scrutiny. Pakistan’s challenges have accumulated over decades, and no single government is responsible for every failure. Successive administrations must nevertheless be judged by their decisions, their willingness to challenge entrenched interests, and their ability to deliver measurable results. Inherited difficulties may explain a starting point; they

Workers in Dina, Punjab. Pakistan’s challenge is not only creating jobs, but creating productive and better-paid work.

cannot become a permanent justification for failing to change direction. The deeper problem is elite capture: the ability of powerful and well-connected interests to shape public decisions in ways that protect their advantages rather than advance the broader national interest. When political patronage takes precedence over merit, access outweighs competence, and accountability becomes selective, institutions gradually lose their independence and public purpose. The consequences extend beyond administrative inefficiency. They influence which reforms proceed, whose interests receive protection, and who ultimately bears the cost of policy failure. Such arrangements also create a culture in which uncomfortable truths become inconvenient, criticism threatens established relationships, and silence is often rewarded more readily than professional courage. Those who benefit from the status quo have little incentive to challenge it, while the costs of weak governance fall disproportionately on citizens who have the least influence over public decisions. Elite capture, therefore, is not merely an economic or institutional problem; it is also a barrier to honest national discourse. Meaningful reform begins when public institutions become accountable to the national interest rather than dependent on the approval of those with the power to resist change. The business community must confront its own responsibility in this environment. Too often, leaders who speak candidly in private become conspicuously agreeable when facing the Prime Minister or addressing a senior military leader in uniform. Critical questions give way to praise, professional judgment to calculated deference, and honest assessments to whatever is most convenient in the room. Respect for authority is legitimate; surrendering independent judgment to it is not. Business leaders must articulate what the country needs, challenge flawed assumptions, and speak with the same conviction regardless of who is listening. When experience is withheld and agreement becomes a performance, decision-makers are deprived of the candid feedback required to correct institutional failures. Pakistan cannot build effective institutions if those with the knowledge and standing to challenge

ANALYSIS

them choose convenience over courage. National progress demands a business community prepared not merely to applaud authority, but to speak the truth to it, even when doing so is uncomfortable. The response must be a disciplined architecture of execution rather than another declaration of reform. Pakistan needs a long-term national development strategy that survives political transitions, supported by policy continuity and institutions capable of delivering results. Public institutions should operate against clear objectives, measurable outcomes, and transparent accountability. Independent performance evaluations should inform public spending, appointments should prioritize professional competence, and leaders should be required to acknowledge failure and correct mistakes. The test of leadership is not whether a policy is announced, but whether it delivers measurable improvements. Reform must also be sequenced around the constraints that most directly undermine sustainable growth. Pakistan must establish predictable policies, credible institutions, and effective accountability. It must broaden the tax base fairly, improve public expenditure, and reform state-owned enterprises that consume resources without delivering commensurate public value. It must strengthen export competitiveness, encourage productive investment, and develop the skills and infrastructure required to raise productivity. Education, nutrition, healthcare, and workforce development must be treated as investments in national prosperity, not residual expenditures. These priorities are interconnected: without capable people, investment cannot achieve its full potential; without competitive production, economic stability cannot sustain rising incomes; and without credible institutions, neither investment nor reform can endure. None of this will succeed without a culture that welcomes critical feedback. Criticism should not automatically be interpreted as hostility and optimism should never require selective presentation of evidence. Political leaders must hear difficult questions; public officials must accept responsibility for results; businesses must support fair competition and productive investment; and development partners should assess their engagement by its contribution to durable reform. Those who

A classroom in Arang Kel, Azad Kashmir. Pakistan’s humancapital challenge is about both access and learning outcomes.

criticize also have a responsibility to offer evidence, sound analysis, and practical alternatives. Speaking the truth is not an exercise in assigning blame. It is the starting point for collective problem-solving. Pakistan possesses the human resources, geographic advantages, and international relevance to pursue a far more ambitious development trajectory. Defense protects our sovereignty, and diplomacy creates strategic space and international opportunities. Development determines whether those advantages translate into a stronger economy and a better future for our citizens. The ultimate measure of progress is not the recognition we receive abroad, but whether children receive a quality education, families can afford nutritious food, workers earn better real incomes, and young people can build meaningful careers at home. There is nothing unpatriotic about confronting poverty, questioning failed policies, or demanding accountability from those entrusted with public responsibility. The real disservice to Pakistan is to ignore inconvenient evidence, celebrate temporary relief as lasting success, or allow the fear of criticism to prevent necessary reform. Candor is not the enemy of national confidence; it is the foundation of durable confidence. Pakistan does not need less optimism; it needs optimism grounded in evidence, ambition supported by execution, and leadership willing to confront truths that may be politically inconvenient but nationally indispensable. Genuine course correction begins with an honest assessment of where we stand, but it succeeds only when that assessment changes decisions, institutions, and outcomes. The ultimate test is whether those entrusted with public responsibility are prepared to measure their performance against results, acknowledge failure, and change course when the evidence demands it. It is time to stop confusing the celebration of progress with the achievement of progress. It is time to start speaking the truth. Muhammad Azfar Ahsan is a public policy advocate, business strategist, and former Pakistan’s Minister for Investment. He serves as a strategic advisor to leading corporate entities, focusing on business policy, investment facilitation, and leadership branding. He writes and speaks extensively on investment, economic governance, business policy, competitiveness, economic transformation, and society.

Hum Network profits fall 78%

as Pakistan’s television advertising industry struggles The country’s only publicly listed television network saw profits fall by nearly 80% in 2026, as advertisers cut spending and the industry confronts a more fundamental shift in how Pakistanis consume entertainment.

or much of the past two decades, Pakistan’s private television industry has enjoyed a relatively straightforward business model: produce popular dramas, attract millions of viewers, and sell those audiences to advertisers. It was a model that helped create some of the country’s most recognisable media brands and turned television broadcasting into a highly profitable business. That business model is now coming under considerable strain. Hum Network, the company behind Hum TV, Hum News and several other entertainment channels, announced its financial results for the year ending June 30, 2026, and the numbers make for uncomfortable reading. The company’s consolidated revenue declined by 24% to Rs8.72 billion, compared

CONSUMER

with Rs11.48 billion in FY2025. Net profit fell an even more dramatic 78%, from Rs1.24 billion to just Rs267 million. Perhaps the most revealing number is operating profit, which collapsed from Rs1.38 billion to Rs82 million, a decline of approximately 94%. For a company that was generating nearly Rs3 billion in annual consolidated profits as recently as FY2024, this represents an extraordinary deterioration in profitability. And Hum’s troubles are not entirely of its own making. Pakistan’s television advertising industry has been struggling with shrinking budgets, changing consumer behaviour, and a gradual migration of viewers and advertisers towards digital platforms. The financial results demonstrate just how quickly the economics of television

broadcasting can deteriorate when advertising revenue begins to decline. Hum’s consolidated gross profit fell from Rs3.31 billion in FY2025 to Rs2.21 billion in FY2026, a decline of approximately 33%. Its gross profit margin narrowed from 28.8% to 25.3%. The problem is that producing and broadcasting television programmes comes with substantial costs that cannot necessarily be reduced as quickly as advertising revenues fall. Hum’s production and transmission costs declined by approximately 20% during FY2026, but that was insufficient to compensate for the larger decline in revenue. Meanwhile, other operating expenses increased sharply, from Rs271 million to Rs835 million, further eroding profitability. The result was an operating margin of less than 1%, compared with approximately 12% in the

previous year. Indeed, the consolidated results show that Hum recorded a loss of Rs123 million before income tax, after accounting for final and minimum tax charges. A positive income-tax adjustment of Rs390 million helped produce the reported net profit of Rs267 million. In other words, even the modest profit that Hum reported for FY2026 was not principally the result of a particularly profitable year of broadcasting operations. There is an important distinction between its standalone and consolidated financial statements. The parent company itself reported a considerably healthier Rs1.2 billion net profit, although that too represented a 43% decline. It is the consolidated figures, encompassing the group’s subsidiaries and wider operations, that reveal the extent of the deterioration. Hum’s difficulties reflect a broader contraction in Pakistan’s advertising market. According to research published by the Pakistan Credit Rating Agency (PACRA) in February 2026, Pakistan’s total advertising expenditure declined from approximately Rs114.6 billion in FY2024 to Rs101.2 billion in FY2025, an 11.7% contraction. Television advertising was hit particularly hard. Spending on television advertisements fell from approximately Rs50.1 billion to Rs41.5 billion, a decline of more than 17%. This matters because television remains heavily dependent on advertising revenue. Unlike streaming platforms, which can charge con-

sumers directly for subscriptions, Pakistan’s conventional television channels generally rely on advertisers to finance their operations. PACRA estimates that Hum TV alone generated approximately Rs4.6 billion in television advertising revenue in FY2025, down 5.6% from the preceding year. Other major channels experienced similar difficulties, including ARY Digital, Geo Entertainment and Geo News. The troubles are therefore not confined to one television network or management team. They reflect weakening demand across an industry that has traditionally relied on a relatively concentrated group of large advertisers. Part of the recent advertising downturn has been attributed to a phenomenon peculiar to Pakistan’s consumer market: the boycott of multinational brands associated, directly or indirectly, with Israel. Following the outbreak of the Gaza war in October 2023, boycott campaigns gained considerable traction in Pakistan, targeting numerous multinational consumer goods companies. These companies have historically been among the country’s largest buyers of television advertising, with substantial marketing budgets supporting entertainment programming across competing networks. During an October 2025 corporate briefing, Hum’s management identified advertising weakness associated with the boycott, divestment and sanctions movement as a significant contributor to the company’s difficulties. Management also pointed to the disrup-

tion of advertising activity during periods of regional military tensions in 2025. The effect was particularly pronounced in the final quarter of FY2025, when advertising activity reportedly fell sharply as major advertisers temporarily withdrew or reduced campaigns. While the company’s latest results do not quantify how much of the FY2026 decline can be attributed to these factors, the continued weakness suggests that the advertising market has struggled to regain its previous momentum. The problem is compounded by the relatively weak growth in consumer purchasing power. Even advertisers unaffected by boycotts have reason to exercise caution when consumers are facing high living costs and constrained disposable incomes. Perhaps the strongest evidence that this is an industry-wide problem comes from the financial performance of Hum’s principal competitors. ARY Communications, one of Pakistan’s largest privately owned broadcasters, experienced a similarly difficult FY2025. According to PACRA, ARY’s revenue declined approximately 22%, from Rs15.2 billion in FY2024 to Rs11.9 billion in FY2025. Its net profit collapsed from Rs1.34 billion to Rs199 million, while its net profit margin fell from 8.8% to just 1.7%. ARY’s difficulties were partly attributed to weaker advertising demand and disappointing viewership around cricket broadcasts affected by geopolitical disruptions.

Taken together, Hum’s and ARY’s results suggest that even the country’s largest and most established broadcasters are finding it increasingly difficult to protect their margins. The industry has reached a point where commanding a substantial television audience is no longer a guarantee of strong profitability. Beyond the immediate advertising downturn lies a potentially more consequential change: Pakistani audiences are increasingly watching television content without actually watching television. The proliferation of inexpensive smartphones, mobile broadband and YouTube has fundamentally changed how Pakistani viewers consume entertainment. Popular Pakistani dramas now regularly attract tens of millions of views on YouTube, often reaching audiences overseas who would otherwise have limited access to Pakistani television channels. For broadcasters such as Hum, this represents both an opportunity and a challenge. YouTube allows the company to monetise its content internationally and earn revenue from audiences far beyond the reach of its traditional television distribution network. Indeed, Profit’s earlier analysis of Hum’s financial performance through March 2026 suggested that digital platforms, principally YouTube, were already approaching half of the company’s revenue on an estimated basis. However, digital distribution also changes the economics of the business. Traditional television advertising gives broadcasters con-

siderable control over how advertising inventory is packaged and sold. YouTube advertising, by contrast, operates through a platform controlled by Google, which determines much of the advertising technology, revenue-sharing arrangements and monetisation policies. Advertisers also have considerably more choices. Rather than purchase advertising space on a handful of popular television channels, brands can reach consumers directly through YouTube, Facebook, Instagram and TikTok. This creates competition not just between television networks, but between professional broadcasters and millions of independent digital content creators. The shift does not necessarily mean that Pakistanis will stop watching professionally produced television dramas. It means that the companies producing those dramas may find themselves earning money through an entirely different distribution and advertising model. Hum’s management has recognised the changing industry landscape. In its October 2025 corporate briefing, the company outlined plans to expand digital-first content, including productions intended specifically for online platforms. It has also pursued opportunities in gaming, animation and other digital media businesses. Such initiatives may eventually help diversify revenues, although their commercial significance remains limited compared

with the company’s established broadcasting operations. Despite the deterioration in earnings, Hum has recommended a final cash dividend of Rs0.50 per share, bringing its total dividend for FY2026 to Rs1 per share, including the interim payment already made. That represents approximately Rs1.13 billion in total distributions — substantially more than the group’s consolidated net profit for the year, although the parent company’s standalone earnings were sufficient to cover the amount. The decision suggests a willingness to maintain shareholder distributions despite the downturn. But the larger question is whether Hum can restore profitability in an advertising market whose underlying economics are changing. For now, the company’s financial performance suggests that the immediate advertising slump has been severe enough to overwhelm the benefits of its expanding digital presence. Hum remains one of Pakistan’s most prominent entertainment businesses, with valuable content, established brands and substantial audiences. But FY2026 has demonstrated that those advantages alone are no longer sufficient to sustain the profitability to which investors had become accustomed. Pakistanis are still watching television dramas. The problem for Hum, and the industry more broadly, is figuring out how to make as much money from those viewers as it once did. n

CONSUMER

Who is buying a quarter of Asia Insurance?

An obscure holding company has acquired the 25.4% stake previously owned by a German-backed investment fund. Public disclosures suggest that the transaction may strengthen the position of the insurer’s existing controlling shareholders, rather than introduce an entirely new investor.

n October 9, 2026, Asia Insurance Company Ltd announced an unusual transaction to the Pakistan Stock Exchange (PSX). A company called Private Stock Holding Ltd had acquired 18.56 million shares in the Lahore-based general insurer, representing 25.42% of its outstanding share capital. The transaction is significant. A quarter of a publicly listed insurance company has changed hands, yet the announcement offers remarkably little information about the buyer, its owners or the price paid. At first glance, the name Private Stock Holding Ltd offers few clues. It does not appear to be a familiar name in Pakistan’s financial services industry, and the PSX announcement provides no information about its ultimate beneficial owners. However, a closer examination of the company’s previous disclosures and credit rating reports offers some answers. The buyer appears to have connections to the insurer’s existing controlling shareholders, the family of Ihtsham ul Haq Qureshi, which already owned approximately 67.8% of Asia Insurance before the transaction. In its August 2026 rating report, the Pakistan Credit Rating Agency (PACRA) described Private Stock Holding Company as a UK-based private equity firm and said that it was backed by the same sponsor interests already associated with Asia Insurance. PACRA did not identify the individual shareholders of the holding company or their respective ownership percentages. Nevertheless, the implication is important: this may be less a conventional takeover by an outside investor than a consolidation of ownership around an existing business family. The transaction has been in preparation for several months. On May 18, 2026, Asia Insurance announced that the Securities and Exchange Commission of Pakistan (SECP) had approved the proposed acquisition of 18,558,243 shares by Private Stock Holding Company. The shares were being sold by the InsuResilience Investment Fund (IIF), a Luxembourg-based investment vehicle associated with German development bank KfW and

managed by Swiss investment manager BlueOrchard Finance. The transaction required regulatory approval because Pakistan’s Insurance Ordinance requires SECP authorisation for substantial acquisitions of insurance company shares. The October 9 announcement confirms that the transaction has now been completed. What remains undisclosed is the consideration paid by the buyer. Neither the May nor October announcement specifies the agreed purchase price. For context, Asia Insurance’s shares closed at Rs37 on October 9, giving the company a stock market capitalisation of approximately Rs2.7 billion. At that market price, the 25.42% block would have a notional value of around Rs687 million. However, that is not necessarily the price paid. Large negotiated transactions can be completed at premiums or discounts to quoted market prices, particularly when the shares of a relatively small listed company trade infrequently. More importantly, the transaction involves the transfer of existing shares. It does not constitute a fresh capital injection into Asia Insurance. The distinction matters because the insurer faces growing regulatory capital requirements over the coming years. The company’s 2025 annual report provides a particularly revealing picture of its ownership. As of December 31, 2025, Ihtsham ul Haq Qureshi, the company’s chairman, personally owned 46.91 million shares, equivalent to 64.26% of its outstanding equity. His wife, Nosheen Ihtsham, owned another 0.60%, while Zain ul Haq Qureshi, the chief executive, owned approximately 2.93%. Together with other shares held by directors and their immediate families, this brought the relevant shareholding to approximately 67.8%. The InsuResilience Investment Fund was the second-largest shareholder, owning precisely the 18.56 million shares now transferred to Private Stock Holding Ltd. This leaves an important question. If the new holding company is indeed backed by the same sponsor interests, as PACRA reports, how much of the insurer will ultimately be controlled by the Qureshi family’s wider business interests?

Adding the existing 67.8% holding to the newly acquired 25.42% block produces approximately 93.2% of the company’s equity. That would represent overwhelming ownership concentration if both blocks were ultimately controlled by the same people. However, the public disclosures examined do not establish that the Qureshi family beneficially owns the entire new holding company. It would therefore be premature to assert that it directly or indirectly controls the full 93.2%. What can be said is that PACRA expects continuity in the company’s sponsorship and strategic direction, rather than a fundamental change in control. The identities of Private Stock Holding Ltd’s ultimate beneficial owners, and the proportions in which they own the acquisition vehicle, remain the important missing pieces. Asia Insurance is not a newcomer to Pakistan’s insurance industry. Established in Lahore on December 6, 1979, the company commenced commercial operations in 1980 and was listed on the stock exchange in 1982. Its business expanded through the 2002 merger with Indus Insurance Company Ltd, which helped broaden its operating presence. Over the following decades, Asia Insurance established itself as a general insurance provider, serving commercial enterprises, agricultural businesses and individual customers. It currently operates through approximately 30 branches across Pakistan, with its head office in Lahore. Unlike life insurance companies, which primarily sell protection and long-term savings products, general insurers cover risks associated with physical assets, commercial operations, accidents and other contingencies. Asia Insurance’s portfolio encompasses fire and property insurance, marine cargo and transport insurance, motor vehicle coverage, health and personal accident insurance, agriculture and livestock insurance, and miscellaneous commercial risks, including bonds and suretyship. Fire and property insurance constitutes the largest part of its business. In August 2015, the company also received permission to establish window takaful operations, enabling it to offer Shariah-compliant general insurance products alongside its conven-

tional business. The company has historically placed particular emphasis on agricultural insurance, which would eventually attract the interest of an international development finance investor. The InsuResilience Investment Fund’s investment in Asia Insurance dates back to March 2018. The fund acquired a 25.4% stake through a rights issue subscription, investing approximately Rs350 million in fresh capital. The investment formed part of a broader strategy to expand insurance coverage for vulnerable populations in developing economies, particularly those exposed to natural disasters and climate-related risks. Asia Insurance was an attractive target because of its existing agricultural insurance business. According to the fund’s disclosures, agricultural, livestock and farm-equipment insurance accounted for more than 40% of the company’s gross written premiums at the time, and it was providing coverage to more than 100,000 farmers. The investment was intended to strengthen Asia Insurance’s underwriting capacity, allowing it to expand agricultural insurance coverage among lower-income farmers. Beyond the financial investment, IIF also brought international institutional representation into the company’s governance structure. PACRA credits the association with providing capital support and strengthening governance through board representation. The fund’s departure therefore raises a question beyond ownership: what happens to the development-finance orientation that originally motivated the investment? There is no indication that Asia Insurance intends to discontinue agricultural insurance. However, the strategic priorities of the new owners may differ from those of a fund explicitly established to support climate resilience and financial inclusion. The reason for IIF’s exit has not been fully explained in the public transaction disclosures. Interestingly, the ownership change comes at a time when the company’s underlying insurance business has been improving. For the calendar year ending December 31, 2025, Asia Insurance reported combined conventional gross premiums and takaful contributions of Rs1.82 billion, compared with Rs1.38 billion in 2024, an increase of approximately 32%. Conventional gross premiums rose from Rs1.23 billion to Rs1.58 billion, while takaful contributions increased from Rs146 million to Rs244 million. Net insurance premium revenue increased approximately 10% to Rs1.09 billion. The company reported net profit of Rs178.3 million, compared with Rs168.4 million in 2024, an increase of approximately 6%. That improvement followed several difficult years. In 2022, Asia Insurance recorded a net loss of Rs73.8 million. It returned to profitability

in 2023, earning Rs85.7 million, before profits almost doubled in 2024. The 2025 results therefore represent the continuation of a recovery that has gradually strengthened the company’s balance sheet. However, as with many Pakistani insurance companies, investment income remains an important contributor to profitability. Asia Insurance generated approximately Rs36 million in conventional underwriting profit during 2025, compared with Rs189 million in investment income. The company’s window takaful operator fund contributed another Rs46 million in profit. This illustrates an important characteristic of insurance businesses: they do not necessarily generate most of their earnings from underwriting premiums alone. Insurers collect premiums before claims are paid, creating funds that can be invested in government securities, bank deposits, equities and other permitted assets. The investment returns earned on these funds can constitute a substantial proportion of overall profitability. Asia Insurance’s considerable exposure to equities has also introduced earnings volatility. Financial performance during the first six months of 2026 suggests that the company’s insurance operations are continuing to expand. Total gross premiums and takaful contributions reached approximately Rs1.01 billion during the half-year ending June 30, 2026. Conventional premiums grew approximately 15% compared with the corresponding period of 2025, while takaful contributions increased approximately 41%. Net insurance premium revenue rose to Rs683.4 million, compared with Rs489.2 million a year earlier. More importantly, conventional underwriting profit increased from Rs23.7 million to Rs71.6 million, suggesting an improvement in the profitability of the underlying insurance business. Investment income, however, declined from approximately Rs57 million to Rs20 million. As a result, net profit increased more modestly, from Rs69.7 million to Rs82.7 million, representing growth of approximately 19%. In August 2026, PACRA reaffirmed Asia Insurance’s insurer financial strength rating of A++ with a stable outlook, recognising improving underwriting performance while noting its relatively modest scale. Despite its long operating history, Asia Insurance remains a relatively small participant in Pakistan’s general insurance industry. According to PACRA, the sector generated approximately Rs245 billion in gross written premiums during 2025. Asia Insurance’s Rs1.82 billion in conventional premiums and takaful contributions translates into a market share of roughly 0.7%. The company is therefore considerably smaller than industry leaders such as Adamjee Insurance, Jubilee General Insurance and EFU

General Insurance. Nevertheless, the industry offers considerable room for expansion. General insurance penetration in Pakistan remains around 0.2% of GDP, reflecting limited coverage among households, small businesses and agricultural enterprises. Regulatory changes are also creating new capital requirements. Under rules introduced by the SECP in March 2025, existing non-life insurers must increase their minimum paid-up capital to Rs1 billion by December 2026, Rs1.5 billion by December 2028 and Rs2 billion by December 2030. Asia Insurance currently has paid-up share capital of approximately Rs730 million, leaving a shortfall of Rs270 million against the first deadline. This is particularly relevant to the ownership transaction. While the acquisition by Private Stock Holding Ltd changes who owns the company, it does not itself provide new capital to satisfy these requirements. The new shareholders may therefore eventually need to support additional capitalisation, either through fresh equity or permissible capitalisation of reserves. The immediate transaction appears straightforward: a German-backed investment fund has sold its quarter-stake in Asia Insurance to an obscure holding company whose underlying sponsor interests, according to PACRA, are aligned with the insurer’s existing shareholders. But the broader implications are more interesting. If the buyer is effectively an investment vehicle for interests associated with the existing controlling family, the transaction could substantially consolidate ownership of one of Pakistan’s smaller listed insurers. At the same time, the exit of an international development-finance investor would end an eight-year association that helped strengthen the company’s capital base and agricultural insurance business. The transaction also comes just as Pakistan’s insurance industry faces rising capital requirements, growing competition and pressure to expand beyond traditional corporate insurance products. For Asia Insurance, the operational picture is relatively encouraging. Premiums are increasing, underwriting profitability is improving and the company has recovered from its losses earlier in the decade. What remains less clear is precisely who now owns the newly acquired shares, how much they paid, and whether the change will be accompanied by fresh investment. The company has disclosed the name of the buyer. PACRA has provided clues about the interests behind it. A complete explanation of the ultimate ownership structure, however, has yet to emerge from the public disclosures. For a transaction transferring more than a quarter of a listed insurance company, that is a fairly substantial unanswered question. n

INSURANCE

TPL REIT partners with Saima Builders for Karachi waterfront project

The partnership brings together TPL’s institutional real estate investment platform and one of Karachi’s most experienced residential developers, following a model pioneered by Arif Habib and Dolmen that is increasingly becoming central to Pakistan’s REIT industry.

akistan’s real estate investment trust industry is discovering something that the country’s conventional property developers have known for decades: raising capital for a property project is one thing; actually building it, marketing it and selling it is quite another. TPL REIT Fund I has become the latest institution to embrace that distinction, announcing a partnership with Karachi-based Saima Builders for a residential development at its ambitious Mangrove waterfront project in Korangi Creek. In a notice to the Pakistan Stock Exchange (PSX) dated October 9, 2026, TPL REIT Fund I announced that it would formally launch Saima Mangrove Residences on October 10 and 11. The project is being undertaken through National Management & Consultancy (Private) Limited, a special purpose vehicle of the fund, under a Development Advisory Agreement with the Zeeshan Saleem Zaki Group of

Saima Builders. The announcement does not disclose the financial terms of the agreement, the precise division of responsibilities between the parties, or whether Saima will make an equity investment in the project. Nevertheless, the partnership marks an important development in TPL’s attempts to turn its substantial real estate holdings into completed, revenue-generating projects. It also follows an increasingly familiar model in Pakistan’s emerging REIT industry: pairing institutional capital and financial management expertise with established developers that have experience delivering and selling real estate. TPL REIT Fund I is managed by TPL REIT Management Company, a wholly owned subsidiary of the publicly listed TPL Properties. The fund was established as a Shariah-compliant hybrid REIT, allowing it to invest in both rental properties and real estate development projects.

Its portfolio comprises three major developments: One Hoshang, a luxury residential tower in Karachi; Technology Park, a proposed commercial and technology-oriented development; and The Mangrove, an extensive mixeduse project at Korangi Creek. The Mangrove is by far the most ambitious in terms of scale. Spanning approximately 40 acres of waterfront land, the development has been conceived as a master-planned community incorporating residential apartments, commercial offices, retail space, hospitality facilities and recreational infrastructure. The original plans envisage more than 12 million square feet of built-up area, developed over multiple phases. TPL commissioned international architectural and engineering consultancy SSH International to prepare the master plan, with particular emphasis on preserving the surrounding mangrove ecosystem. The location offers waterfront views and proximity to Defence Housing Authority, Korangi’s industrial districts and the wider Karachi metropolitan area.

However, the sheer scale of the project also creates challenges. Unlike a conventional apartment development comprising one or two buildings, The Mangrove requires substantial infrastructure investment, construction spread over several years and an ability to market thousands of residential and commercial units. TPL has already undertaken preparatory development work, completed master planning and launched an initial residential tower, Lagoon Views I, in February 2025. Its March 2026 quarterly report described ground improvement, test piling, infrastructure planning and the appointment of a new development adviser, while construction of TPL’s own office facilities at the site had commenced. But progressing from these preliminary activities to large-scale construction and apartment sales is a much more demanding undertaking. This is presumably where Saima Builders comes in. Saima is among Karachi’s better-known property development brands, with a history stretching back several decades. The group was established by Saleem Zaki and is now associated with his son, Zeeshan Saleem Zaki, who leads the business. According to the group’s own disclosures, it has completed more than 80 residential and commercial projects, with more than 30 additional developments under way. Its portfolio includes apartment complexes, housing developments and commercial properties across Karachi and other urban centres. The relevance of this experience extends beyond construction. Residential real estate development in Pakistan remains a business in which brand recognition, customer relationships, broker networks and experience with instalment-based sales can be just as important as access to land or financing. For an institutional investor such as TPL, partnering with an established developer offers a way to acquire expertise and market credibility without necessarily building every aspect of the development business internally. Indeed, TPL’s own investor presentation earlier in 2026 identified partnerships with established Karachi builders as a way to accelerate The Mangrove. Management suggested that such an arrangement could enable the launch of three residential towers during calendar year 2026 and potentially shorten the project’s overall development timeline from 10–12 years to 7–9 years. That could accelerate cash generation and eventual distributions to the fund’s investors. Those projections are not guarantees, however, and the latest announcement provides no revised construction timetable or independently verifiable sales targets. It is also

important to note that Saima has been identified as a development adviser, not necessarily as an equity partner or the sole construction contractor. The idea of combining institutional investment expertise with established property developers is hardly new in Pakistan. In fact, the country’s first successful listed REIT emerged from precisely such a partnership. Arif Habib Dolmen REIT Management was created through a joint venture between the Arif Habib Group, one of Pakistan’s largest financial services and investment conglomerates, and the Dolmen Group, an established developer and operator of commercial real estate. The two groups joined forces in 2014, combining Arif Habib’s capital markets expertise with Dolmen’s experience developing and operating shopping malls and commercial properties. The partnership launched Dolmen City REIT in 2015, allowing public investors to acquire an economic interest in Dolmen Mall Clifton and The Harbour Front office complex. Unlike TPL’s Mangrove project, Dolmen City REIT was primarily a rental investment, generating income from existing commercial properties rather than relying on the eventual sale of newly constructed apartments. Nevertheless, it established the basic principle that successful REITs benefit from combining financial expertise with specialist real estate capabilities. That model has since been extended into development projects. One example is Globe Residency REIT, managed by Arif Habib Dolmen REIT Management, which was established to develop residential apartments within Karachi’s Naya Nazimabad housing scheme. The underlying development originated with Javedan Corporation, the Arif Habib Group company responsible for developing Naya Nazimabad. Globe Residency’s original plans involved nine apartment towers comprising 1,639 apartments, with financing that included an arrangement with Meezan Bank for three towers. Arif Habib Real Estate Services was appointed project manager, illustrating how a REIT can draw upon specialist property development and management capabilities within a wider corporate group. Another example is Naya Nazimabad Apartment REIT, which moved towards public-market investment in 2026. Once again, Javedan Corporation provides the established property development platform, while Arif Habib Dolmen manages the investment structure. Signature Residency REIT follows a similar model, financing a residential and com-

mercial development within Naya Nazimabad through the REIT framework. Beyond these projects, the Silk Islamic Development REIT brought together prominent corporate investors, including the Yunus Brothers, Fatima, Liberty and Arif Habib groups, demonstrating another way in which institutional investors have pooled capital for property development. The distinction is that the Arif Habib-Dolmen arrangement is a longstanding ownership partnership, whereas TPL’s disclosed arrangement with Saima is specifically a development advisory agreement. The increasing number of such arrangements reflects the maturation of Pakistan’s REIT market. For decades, much of the country’s property development industry was financed through sponsors’ own capital, informal investment networks and advance payments from prospective buyers. REITs potentially introduce a more structured alternative, with regulated fund management, independently valued assets and the ability to raise capital from institutional and public investors. But access to capital does not eliminate construction risk, regulatory delays, weak sales demand or the possibility of cost overruns. Developmental REITs are particularly exposed to these risks because their returns depend heavily on completing projects and selling units at commercially attractive prices. TPL’s decision to engage Saima suggests an acknowledgement that a successful investment structure also requires a commercially effective development and sales operation. For Saima, the partnership offers an opportunity to participate in a large waterfront project backed by an institutional investment vehicle. For TPL, it could provide an experienced local partner capable of accelerating construction and attracting residential buyers. The potential benefits are considerable, but the decisive measures will be the pace of construction, actual booking and collection figures, and the profitability ultimately generated for investors. The partnership is therefore an important step, but not yet proof that The Mangrove’s development risks have been resolved. As Pakistan’s REIT industry expands, the companies most likely to demonstrate the viability of the model will be those that combine institutional capital with the ability to deliver completed buildings and reliable financial returns. TPL’s partnership with Saima Builders is another attempt to bring those two capabilities together. Whether it proves as consequential as the earlier Arif Habib-Dolmen partnership will depend on what gets built, sold and delivered over the coming years. n

REAL ESTATE

Quantum Data Technologies has big plans. They start with cleaning up its past. The former Chakwal Spinning Mills wants to become a major player in cloud computing, data centres and IT services. What it has done so far has been the settlement of liabilities from its shuttered textile business

uantum Data Technologies has some rather ambitious plans for a company that, until recently, was a defunct textile manufacturer. It wants to enter cloud computing, build data centres, develop software, establish international technology partnerships and raise Rs1 billion in fresh equity to finance its transformation.

There is just one problem: very little of this has actually happened yet. On October 8, 2026, the company announced that it had completed the settlement of its outstanding banking liabilities with the Bank of Punjab and Habib Metropolitan Bank. It is an important achievement for a company whose previous business collapsed under the weight of financial difficulties. But it is also

worth distinguishing what the company has accomplished from what it says it intends to accomplish. So far, Quantum’s most substantial achievement has been cleaning up the financial mess left behind by its old business. Its much-publicised ambitions in the technology sector remain largely just that: ambitions. Quantum Data Technologies was

previously known as Chakwal Spinning Mills, a textile manufacturer incorporated in 1988. The company’s spinning operations ceased in March 2020, leaving it with idle industrial assets, mounting losses and outstanding obligations to financial institutions. For the next several years, Chakwal Spinning Mills generated no operating revenue. Nevertheless, it continued to incur expenses, gradually accumulating losses exceeding Rs1.2 billion. By 2025, the company had become one of several publicly listed Pakistani businesses whose stock market presence considerably outlasted their commercial operations. Rather than restart spinning operations, management decided to reinvent the company. In December 2025, Chakwal Spinning Mills changed its name to Quantum Data Technologies, reflecting a proposed shift into information technology and related businesses. The Pakistan Stock Exchange subsequently transferred the company from the textile sector to the technology and communications sector in February 2026. The transformation on paper was relatively straightforward. Turning a shuttered textile manufacturer into a functioning technology company, however, is an altogether different proposition. Quantum’s annual report for FY2026 provides an expansive account of management’s ambitions. The company plans to establish cloud computing infrastructure, provide software development and IT services, and enter the data-centre business. Its stated ambitions include establishing what it describes as Pakistan’s first cloud data centre. It has also outlined plans to pursue international technology collaborations and expand into artificial intelligence and data-related services. These are potentially attractive businesses. Pakistan’s growing digital economy, increasing corporate demand for cloud services and the government’s interest in domestic data infrastructure provide an opportunity for investors willing to commit sufficient capital. But the company’s disclosures provide little evidence that these larger ambitions have progressed beyond the planning stage. There has been no disclosed completion of a data centre, no demonstrated investment in substantial new technology infrastructure and no announcement establishing that the proposed international partnerships have translated into meaningful commercial operations. Indeed, the company’s FY2026 cash-flow statement shows no expenditure on purchases of property, plant or equipment. Management has also discussed raising Rs1 billion in fresh equity through an arrangement with Intermarket Securities. The money is intended to come from sponsors and private investors.

But an agreement to arrange financing is not the same thing as successfully raising it. The company has yet to demonstrate that this proposed capital injection has materialised. Interestingly, the annual report also discusses restarting its shuttered spinning unit through a balancing, modernisation and replacement programme. This suggests that even the company’s departure from textiles may not be quite as definitive as its new name implies. For now, the company’s technology ambitions substantially exceed its demonstrated operational capabilities. There is one important qualification to the suggestion that nothing has happened on the technology front. Quantum’s financial statements for the year ending June 30, 2026 show revenue of Rs84.96 million from its newly commenced IT business, compared with no revenue in the preceding year. The company reported gross profit of Rs74.08 million, representing an unusually high gross margin of approximately 87%. However, the figures become considerably less impressive upon closer examination. Of the Rs84.96 million in reported revenue, Rs84.16 million remained outstanding as trade receivables at the end of June 2026. In other words, approximately 99% of the revenue had not been converted into cash by the balance-sheet date. The revenue was classified as exports to the United Arab Emirates. While the company has therefore recorded some commercial activity under its new business model, its financial statements do not yet establish a significant, cash-generating technology business. Indeed, operating cash flow was negative Rs25.78 million during FY2026, while cash and bank balances at year-end amounted to just Rs3.23 million. The company also remained loss-making, reporting a net loss of Rs36.13 million. That was an improvement over the Rs117.73 million loss recorded the previous year, but accumulated losses still stood at approximately Rs1.25 billion. Meanwhile, approximately Rs1.85 billion of its Rs2 billion asset base consisted of property, plant and equipment, overwhelmingly associated with the legacy industrial business. Quantum may now have a technology-sector classification, but its balance sheet still looks very much like that of an old textile company. Against this backdrop, the settlement of Quantum’s longstanding banking liabilities represents its most tangible achievement. In July 2026, the company announced that it had reached settlements with its two principal lenders. The Bank of Punjab issued a no-liability certificate, while Habib Metropolitan Bank agreed to settle its claims for Rs360 million, payable in three instalments. Quantum estimated that the settlements

would generate savings exceeding Rs300 million through concessions and waivers. On October 8, the company confirmed that both settlements had been completed, leaving no outstanding banking liabilities with either institution. Crucially, the settlements were also expected to facilitate the release of the company’s industrial property near Pattoki, comprising approximately 132.5 kanals of land and nearly 300,000 square feet of covered space. Management estimates the property’s market value at more than Rs2 billion. This is potentially valuable. The land could eventually be sold, redeveloped or otherwise monetised to help finance the company’s new ambitions. But these possibilities remain contingent on subsequent decisions and execution. The completion of the settlements does not, by itself, establish that Quantum has the capital, expertise, technology or customer relationships required to compete in the IT industry. Quantum’s auditors highlighted material uncertainty over its ability to continue as a going concern in their FY2026 report, citing accumulated losses and longstanding financial difficulties. The subsequent banking settlements address an important component of those concerns. Nevertheless, they do not resolve the company’s underlying challenge: establishing a profitable, sustainable business. There is nothing inherently unreasonable about a struggling listed company attempting to reinvent itself in a more promising industry. Indeed, Quantum’s considerable physical assets and existing stock-market listing could provide useful foundations for a new business. But investors should distinguish between financial restructuring and operational transformation. The former involves resolving historical obligations and cleaning up the balance sheet. The latter requires developing products and services, attracting customers, investing capital and generating reliable cash flows. Quantum has made meaningful progress on the first. Its record on the second remains extremely limited. The next milestones will therefore matter considerably more than another announcement about strategic opportunities. Investors will need to see actual capital raised, infrastructure developed, substantial contracts secured and, above all, revenues converted into cash. Until then, Quantum Data Technologies is less a technology-sector turnaround story than a former textile company that has managed to settle its old debts and is hoping to build something new. It has successfully dealt with part of its past. Whether it has a viable future remains an open question. n

TEXTILES

Next Capital profits surge in 2026, but its most exciting business may be Finqalab The Karachi-based brokerage has reported a 63% increase in operating revenue and a nearly sevenfold increase in standalone profits. Behind the strong results is a firm founded by one of Pakistan’s capital markets veterans, whose son has helped create one of the country’s most promising retail investment platforms.

akistan's stock market has enjoyed a remarkable revival over the past two years, with rising share prices, increasing trading volumes and renewed investor interest. For the country's stockbrokers, this has translated into a much-needed improvement in business. Few companies have illustrated that improvement quite as clearly as Next Capital. On October 6, 2026, the Karachi-based investment banking and securities brokerage firm announced its financial results for the year ending June 30, 2026, reporting a 63% increase in operating revenue to Rs469.7 million, compared with Rs287.6 million the previous year. The increase in profitability was even more impressive. On a standalone basis, Next Capital reported net income of Rs93 million, compared with just Rs13.8 million in FY2025, an increase of approximately 573%. Earnings per share rose from Rs0.24 to Rs1.63. The consolidated results, which incorporate the company's investments in subsidiaries, were somewhat less spectacular, with net profit increasing to Rs37 million from Rs13.8 million. Nevertheless, the increase represents a substantial improvement over the previous year. Yet perhaps the most interesting development at Next Capital is not the strong recovery in its traditional investment banking and brokerage operations. It is a product called Finqalab. Launched in June 2024, Finqalab is a smartphone-based investment platform that aims to make investing in the Pakistan Stock Exchange considerably easier for ordinary Pakistanis. It represents an attempt to fundamentally change a business that has historically catered to wealthy individuals, financial institutions and relatively sophisticated investors. And in an interesting generational twist, the vision behind the platform came not prin-

cipally from Next Capital's founder, but from his son.

A good year for the brokerage business

ext Capital's improved performance comes against the backdrop of renewed activity in Pakistan's capital markets. Following years of economic instability, high interest rates and depressed equity valuations, the Pakistan Stock Exchange experienced a substantial recovery beginning in 2023. Declining inflation, reductions in the State Bank of Pakistan's policy rate and improving macroeconomic stability encouraged investors to shift money towards equities. Rising share prices attracted additional investors, while increased turnover translated into higher commission income for brokerage firms. This is particularly important for companies such as Next Capital, whose operating revenues depend substantially on the volume and value of securities traded by their clients. The company's earlier financial results illustrate the importance of this relationship. During FY2025, Next Capital's brokerage income increased approximately 97% to Rs238.4 million, according to its December 2025 corporate briefing, reflecting stronger activity in both the ready and futures markets. Its investment banking and advisory business also benefited from an improving environment for corporate transactions. Next Capital has been involved in several high-profile transactions, including advising on Maple Leaf Cement's acquisition of Agritech and its proposed combination with Pioneer Cement. The firm has also worked on sukuk issuances for Sitara Chemical Industries and Burj Clean Energy Modaraba, and was appointed

manager to the offer in connection with Nishat Hotels and Properties' proposed acquisition of Rafhan Maize. These assignments illustrate the breadth of its business, which extends beyond conventional stockbroking into mergers and acquisitions, capital raising, debt advisory and corporate finance. The FY2026 figures suggest that Next Capital has continued benefiting from the revival in market activity. Operating revenue increased by Rs182.1 million, while standalone profit before levies and taxation rose from Rs23.2 million to Rs120.2 million. Other income also increased substantially, contributing to the improvement in profitability. The company's cash and bank balances rose from approximately Rs425 million to more than Rs1 billion, while short-term borrowings declined. Despite the improved performance, the board did not recommend a dividend. But there is an important distinction between the standalone and consolidated results. The parent company's Rs93 million profit falls to Rs37 million at the consolidated level, reflecting the impact of its subsidiary operations and consolidation adjustments. That difference is relevant because Next Capital is investing in a technology business whose commercial potential may be considerable, but whose development also comes with substantial costs.

The man who helped build Pakistan's capital markets

ext Capital was founded by Najam Ali, one of the more experienced figures in Pakistan's investment management and capital markets

industry. Ali's career spans more than three decades and includes leadership positions at some of the country's most important financial institutions. Perhaps his most consequential contribution came as the founding chief executive officer of the Central Depository Company of Pakistan (CDC). The establishment of the CDC was a fundamental development in modernising Pakistan's capital markets. Before the introduction of electronic securities custody, investors relied heavily on physical share certificates, creating considerable administrative difficulties and risks associated with transferring ownership. The CDC helped replace that system with electronic record-keeping, making the trading and settlement of securities considerably more efficient. Ali also helped lead the development and implementation of Pakistan's National Clearing and Settlement System, another major improvement in the country's capital markets infrastructure. He subsequently served as an executive director at the Securities and Exchange Commission of Pakistan, overseeing securities markets and non-bank financial companies. Later, he became chief executive officer of JS Investments, which grew into one of Pakistan's largest private-sector asset management companies during his tenure. He also served twice as chairman of the Mutual Funds Association of Pakistan. In December 2009, Ali established Next Capital, bringing his experience in brokerage, investment management and financial regulation into an independent investment banking and securities business. The company obtained stock exchange membership in February 2010 and was listed on the Karachi Stock Exchange, now part of the PSX, in April 2012. Over the following decade, it built a business serving institutional investors, corporate clients and wealthy individuals. Ali has since stepped back from the chief executive position, with Humaira Asad taking over the role following her appointment in October 2025. He remains associated with the firm's leadership as vice-chairman. But it was a younger member of the family who would introduce an entirely different vision for the company's future.

The son who imagined Finqalab

yed Irtaza Ali, Najam Ali's son, followed a rather different path into finance. Educated at Karachi Grammar School and the University of Pennsylvania, Irtaza began his career in investment banking at Credit Suisse in New York, where he worked between 2017 and 2020. He subsequently returned to Pakistan and joined Next Capital,

eventually becoming its chief operating officer. What he encountered was an industry whose technological infrastructure had improved considerably over the preceding decades, but whose relationship with ordinary retail investors remained remarkably old-fashioned. Opening a brokerage account was often cumbersome. Investment information was not always easily accessible. Many brokerage firms were oriented towards established clients rather than first-time investors. For someone accustomed to the digital financial services available in more developed markets, the opportunity was obvious. Why should investing in Pakistani shares require such a complicated process when almost every other financial service was increasingly becoming available through a smartphone? The idea behind Finqalab began taking shape in 2021. Irtaza has described how its earliest designs consisted of hand-drawn wireframes on printer paper. Those drawings eventually evolved into the investment platform that launched commercially in June 2024. While Najam Ali provided the institutional experience and financial infrastructure, Irtaza was the driving force behind the product's conception and early development. The importance of his role is reflected in Next Capital's own corporate disclosures, which explicitly recognise the co-founder's contribution to conceiving Finqalab, developing the business and leading its customer acquisition efforts. Irtaza subsequently left his operating role at Next Capital to pursue an MBA at Harvard Business School, but remained associated with the venture as a co-founder. The result is an interesting combination of two generations of financial expertise: one that helped develop the infrastructure of Pakistan's securities markets, and another seeking to make those markets accessible to a much broader population.

Why Finqalab matters

akistan has a peculiar relationship with financial markets. Despite a population exceeding 240 million, the number of individuals investing directly in listed equities remains extraordinarily small. Even after the recent stock market boom, the country had approximately 630,000 registered investor accounts in August 2026, according to figures based on National Clearing Company data. That represents a tiny fraction of the population. The reasons are numerous: limited financial literacy, distrust of financial intermediaries, a preference for real estate and gold, and the perception that the stock market is a place for speculators rather than ordinary savers. Finqalab is attempting to address at least some of these barriers.

The platform enables customers to open brokerage accounts digitally, deposit funds and buy or sell shares through a smartphone application. Crucially, it places considerable emphasis on usability, transparency and financial education. Rather than assume that customers already understand the mechanics of investing, the platform provides information about companies, portfolio performance and market developments. Its accompanying educational platform, Finqalab Academy, produces videos and other material designed to introduce younger investors to financial markets. The proposition is not simply to replace a conventional brokerage terminal with a mobile application. It is to make investing understandable and accessible to people who might otherwise never consider opening a brokerage account. The early figures suggest that the strategy has found an audience. According to Next Capital's December 2025 corporate presentation, Finqalab had recorded more than 32,000 registrations and opened approximately 8,500 investment accounts by November 2025. More strikingly, approximately 83% of its customers were first-time investors, while the average customer age was just 31.4 years. The company had processed approximately Rs20 billion in cumulative trading value. By January 2026, according to figures reported by Business Recorder, the platform had crossed 40,000 registrations, 10,000 trading accounts and Rs26 billion in cumulative transactions. Within approximately 15 months of launch, Finqalab had also entered the country's top ten brokerage platforms by active investor accounts. For a product launched less than two years earlier, these are significant achievements. The numbers also demonstrate that Finqalab is doing more than merely persuading existing investors to switch brokers. Its unusually high proportion of first-time customers suggests that it is helping bring new participants into Pakistan's capital markets.

Can Finqalab become a much bigger business?

inqalab's significance extends beyond its current brokerage operations. The longer-term ambition is to develop a platform through which Pakistani households can access multiple investment products. These could eventually include mutual funds, government securities, insurance and other financial services, subject to regulatory approvals and commercial feasibility. The idea is that a customer who begins by buying a few shares could eventually use

CAPITAL MARKETS

the same platform to manage a much broader investment portfolio. There are precedents for this model internationally. In India, platforms such as Zerodha and Groww helped transform retail participation in equities by making brokerage accounts inexpensive, convenient and accessible. Their growth demonstrated that technology can significantly expand the population willing to invest in financial assets. Pakistan's market is substantially smaller and faces different regulatory and economic challenges, but the underlying opportunity is similar. Finqalab is not the only Pakistani firm pursuing digital stockbroking. Several established brokers have introduced mobile applications and simplified onboarding processes. Nevertheless, its emphasis on firsttime investors and product design has helped distinguish it within the market. There are challenges, however. Digital platforms require continuous spending on technology, customer acquisition, regulatory compliance and support services. Finqalab has also faced customer complaints about service responsiveness during periods of rapid growth, prompting improvements to its support systems. Moreover, a rapidly expanding customer base does not automatically translate into immediate profitability. Next Capital's consolidated FY2026 results demonstrate the financial implications of developing a new business alongside an established brokerage operation. The difference between standalone and consolidated profits suggests that building the platform is still imposing costs on the group. There are also ownership considerations. Next Capital's FY2025 annual report disclosed that the company held 76% of Finqalab Technologies, while Najam Ali and Irtaza Ali together held 24%. Shareholders subsequently approved a proposal to transfer an additional 16% stake to the co-founders or their nominees, which would reduce Next Capital's interest to 60%. The arrangement was intended to recognise the founders' contribution and align their incentives with the platform's long-term growth. For Next Capital's public shareholders, the crucial issue will be how much economic value the listed company ultimately retains as Finqalab expands.

A brokerage with two growth engines

ext Capital's FY2026 results tell two distinct stories. The first is about the recovery of a conventional financial services company benefiting from stronger trading activity and an improving environment for investment

banking transactions. The second is about a potentially transformative financial technology business that is attempting to expand Pakistan's investor base. The first is already producing substantial improvements in revenue and profitability. The second is still developing its commercial model, but could eventually prove considerably more consequential. Indeed, Finqalab's ability to attract thousands of first-time investors suggests that Next Capital may have identified an opportunity that extends well beyond the cyclical recovery in brokerage commissions. For decades, Pakistan's securities industry has largely competed for business from an existing pool of relatively wealthy investors. Finqalab's proposition is fundamentally different: rather than compete exclusively for investors who already participate in the market, it wants to create new investors. If that approach succeeds at scale, the implications would extend beyond Next Capital itself. A larger retail investor population could improve market liquidity, broaden participation in capital raising and create more opportu-

nities for Pakistani businesses to raise equity. There is, of course, a considerable distance between attracting 10,000 customers and transforming a national investment culture. Sustained growth will require continued improvements in technology, customer service and the range of products offered. But Next Capital now finds itself in an enviable position. Its established brokerage and investment banking businesses are enjoying a recovery, while its younger technology venture is attracting a new generation of investors. For Najam Ali, whose career included helping build the infrastructure that made modern securities trading possible in Pakistan, there is a certain symmetry in the development. His generation helped create the systems through which Pakistanis could trade shares electronically. His son's venture is attempting to persuade millions more Pakistanis to actually use them. And that may ultimately prove to be a more valuable achievement than even Next Capital's impressive FY2026 earnings growth.

Organic Meat Company’s revenues decline as dependence on UAE market remains a concern The meat exporter saw revenues decline by 12% and profits collapse by 74% in 2026, despite efforts to diversify into China and other international markets. Its historically heavy exposure to the UAE remains an important vulnerability.

or years, the United Arab Emirates has been one of the most important destinations for Pakistani meat exports, and few companies have benefited from that relationship quite as much as The Organic Meat Company (TOMCL). The Karachi-based company has built a substantial business supplying beef and other meat products to customers in the Gulf, while increasingly expanding into China, Central Asia and other international markets. But the company's latest financial results suggest that this once rapidly growing business is encountering considerable

difficulties. On October 5, 2026, TOMCL announced its financial results for the year ending June 30, 2026, reporting consolidated revenue of Rs12.38 billion, down 12% from Rs14.01 billion the previous year. Net profit declined even more sharply, falling 74% from Rs430 million to just Rs112 million. The decline follows two consecutive years of weaker profitability despite expanding sales. The company had reported profits of Rs722 million in FY2023 and Rs497 million in FY2024. The latest results are particularly disappointing considering that management

had previously projected approximately 10% revenue growth for FY2026, supported by new export contracts and investments in processing capacity. Instead, the company has experienced its first annual revenue contraction in several years, raising questions about the sustainability of its export-driven growth strategy. The UAE has historically been TOMCL's single largest international market, accounting for a substantial proportion of its export revenues. In FY2024, the company generated approximately Rs7.21 billion in sales to the UAE, representing 61% of its total revenue and nearly two-thirds of its exports. However, the following year saw a striking change. UAE revenue declined approximately 37% to Rs4.57 billion in FY2025, even as the company's overall revenue increased by 19%. The UAE still accounted for approximately 56% of the company's export sales and almost one-third of total revenue, but the decline demonstrated the risks associated with dependence on a single overseas market. Much of the overall revenue growth in FY2025 came from a substantial increase in domestic sales, which rose from approximately Rs510 million in FY2024 to Rs5.87 billion. Exports, meanwhile, declined to Rs8.13 billion from approximately Rs11.29 billion. The company was therefore already experiencing a significant shift in its geographical revenue mix before the latest financial year began. The precise contribution of the UAE to the FY2026 revenue decline cannot be established from the geographical figures independently verified for this story. Nevertheless, the preceding year's sharp contraction in UAE sales provides important context for understanding the company's difficulties. Indeed, management itself acknowledged the risks associated with the market during its November 2025 corporate briefing, identifying a reduction in reliance on unsecured credit-based sales to the UAE as one of its strategic priorities. The company's FY2026 financial statements reveal that the deterioration was not limited to falling sales. Consolidated gross profit declined approximately 24%, from Rs1.43 billion to Rs1.09 billion, while gross profit margins narrowed from 10.2% to 8.8%. This indicates that the company was earning less profit on each rupee of revenue, even before accounting for administrative, selling and financing expenses. Operating profit fell 62% to Rs249 million. One particularly noteworthy development was the increase in allowances for expected credit losses, which rose approximately 34%, from Rs159 million to Rs212 million.

These provisions reflect anticipated losses on receivables and other credit exposures. While the financial results do not establish that the increase originated from UAE customers, the development is significant given management's previously stated concerns about unsecured credit sales in Gulf markets. The deterioration was particularly severe towards the end of the year. During the first nine months of FY2026, TOMCL had reported consolidated profits of approximately Rs388 million. Comparing those results with the full-year figures implies a loss of approximately Rs275 million during the final quarter, including any year-end adjustments. Even a significant reduction in financing costs, which fell from Rs140 million to Rs64 million, was insufficient to protect the company's bottom line. The board has not recommended a final dividend. TOMCL has not been standing still. Established in 2010 and listed on the Pakistan Stock Exchange in 2020, the company has developed a broad product portfolio encompassing chilled and frozen beef, mutton, edible offal, cooked meat and dehydrated pet treats. Its facilities in Karachi include slaughtering, processing, animal fattening and specialised meat-processing operations. In recent years, management has increasingly sought to reduce reliance on traditional Gulf markets by expanding into China, where the company secured approvals for exports of cooked beef, as well as Central Asian markets and Europe. In September 2025, TOMCL announced a $7.5 million export order for cooked frozen boneless beef to China, alongside an $8.1 million contract with UAE-based Gold Crest Trading for frozen boneless beef. The company also secured approval to supply Carrefour's

operations in the UAE and other Gulf markets. Meanwhile, the acquisition of Mohammad Saeed Mohammad Hussain Limited provided an additional platform for processing offal and casings, with commercial operations commencing in October 2025. These initiatives were expected to expand the company's addressable market and introduce higher-value products. However, the latest results suggest that the benefits have not yet been sufficient to offset the pressures affecting its established operations. Pakistan's meat-export industry has considerable long-term potential, particularly given demand for halal meat in the Middle East and growing opportunities in East Asian markets. But the business remains exposed to livestock prices, energy costs, international freight charges, currency movements and changing import regulations. For TOMCL, the immediate challenge is restoring margins while diversifying its customer base and reducing credit risk. The company's earlier geographical disclosures make clear why diversification matters. An export business in which more than half of international revenue comes from one country is inevitably vulnerable to fluctuations in that market. The company's ability to convert newly announced export contracts into sustained revenue growth will be crucial. For now, TOMCL's FY2026 results suggest that expanding into new markets and product categories has proved considerably easier than maintaining profitability. The UAE helped build the company's export business. Its next phase of growth may depend on becoming substantially less reliant on it.

FOOD

OPINION

Mohsin Leghari

The missing water account

akistan can put a dollar figure on wheat cargo. It is much less willing to put an economic cost against the water decisions that help determine whether that cargo will be needed. When wheat is imported, the transaction is visible. There is a tender, a contracted quantity, a price and a demand for foreign exchange. When irrigation becomes unreliable, the consequences are scattered across farm accounts, pumping bills, crop yields and household food expenditure. No single account brings them together. For a country that struggles to finance its imports, this is a serious omission. We scrutinise the cost of purchasing food abroad while giving much less attention to the management of a productive asset that helps grow it at home. WAPDA has estimated the economic and financial benefits of one million acre-feet of water at $1 billion. That is a broad benchmark, not a formula for valuing every missed irrigation. It still raises an uncomfortable question: if water carries such economic significance, where is the economic account of its management? The question is urgent. On October 6, the Indus River System Authority's Advisory Committee approved an anticipated shortage of 22 percent for Punjab and Sindh for the Rabi season against rim-station inflows of 21.268 million acre-feet. Storage on September 30 stood at 9.343 million acre-feet, against 13.214 a year earlier, a ten-year average of 9.938 and the committee's own anticipation of 12.014. WAPDA's daily report shows where

The writer is a former Senator, MNA and Irrigation and Finance Minister of Punjab, a Senior Water Policy Expert with UNDP Pakistan’s National Governance Programme, and a member of the Oxford Climate Leadership Research Centre at the University of Oxford.

the drawdown fell: Tarbela stood at 4.236 million acre-feet, 18 percent below its five-year average, while Mangla, the larger of the two reservoirs since its dam raising, held within 3 percent of its average at 5.095. Sindh and Punjab produce most of Pakistan's wheat, and the next harvest is beginning under stress while consumers are already paying substantially more for flour. In its September 2026 release, the Pakistan Bureau of Statistics recorded annual food inflation of 8.2 percent. Wheat flour, however, was 31.7 percent dearer in urban markets and 34.3 percent in rural markets than a year earlier. The broader food index conceals the much sharper increase in a staple households must purchase repeatedly. Imports can restrain prices and prevent a supply gap from becoming a deeper crisis, but financing them requires foreign exchange, and their domestic price is exposed to international markets, freight and the exchange rate. Reliable domestic production helps limit that exposure. It begins with an investment made by the farmer intoseed, fertiliser, cultivation and labour are paid for before the crop earns anything. The farmer commits this capital on an expectation of water. When delivery becomes uncertain, the return on expenditure already incurred becomes uncertain too. Where usable groundwater is available, additional pumping may protect the crop at a higher production cost. Where groundwater is saline, inaccessible or unaffordable, the alternatives narrow. The same canal shortage can mean a higher cost per tonne on one farm and a smaller harvest on another.

A canal in Faisalabad district. For farmers, unreliable water supplies turn pre-sowing investment in seed, fertiliser and labour into a larger financial risk.

These losses travel: weak farm earnings dull rural markets, short supplies squeeze millers, and a national shortfall adds to import demand. Consumers can feel the pinch in higher atta costs even when the farmer earned little from a smaller harvest. The country is not starting from strength. Last season's wheat crop is estimated to have fallen more than two million tonnes short of target. The government first moved to import one million tonnes, then scaled the plan back to 550,000 tonnes as provinces revised their requirements. The Trading Corporation's September tender drew bids ranging from $348.83 to $369.95 a tonne; it has finalised 365,000 tonnes at the floor price, due to arrive by November 20. Consider what that costs. The contracted quantity alone will claim about $127 million in foreign exchange; the full revised programme of 550,000 tonnes implies a total near $192 million. Had the original plan of one million tonnes stood, the bill at tender prices would have run between $349 million and $370 million, more than the federal government spends on water development in an entire year. This is not a forecast. It is what one short season does to the external account. Against that exposure, decisions affecting winter water reserves deserve an economic examination. Dawn reported on September 28 on the political origins of the drawdown in late Kharif. Citing informed sources, it said part of the coming shortage was man-made: more than one million acre-feet of avoidable releases from storage during the outgoing Kharif, made to serve the political needs of the coalition government. Parliamentary interventions, the report said, allowed higher discharges to Sindh against commitments for later adjustments in provincial shares that were not completed within the season. The official record corroborates the volumes, if not the motive. The IRSA Advisory Committee's own review records Sindh drawing 1.262 million acre-feet above its Para 2 Accord share during Late Kharif, as flood supplies under Para 4 of the Water Accord 1991, against Punjab's 0.077. Late Kharif 2026, however, was not a flood season: system inflows ran 8 percent below anticipation, and escapages below Kotri of 10.40 million acre-feet were a third of the previous year's 30.85. The two major reservoirs had peaked at 11.6 million acre-feet on September 9, with Tarbela full, but total storage ended the month below 9.5. A water account, then, exists. What is missing is the economic account. Multiplying the release volume by that benchmark would not establish a proven billion-dollar loss. Leaving its consequences unexplained is equally unsatisfactory. Questions need to be asked. What

Tarbela Dam in Pakistan. The Rabi shortage has revived questions over how seasonal water releases are planned, recorded and economically assessed. alternatives were considered? What reserve was expected to remain for Rabi? Could the promised adjustments actually be completed within the remaining season? A political accommodation can deliver an immediate benefit while transferring costs to people absent from the meeting: less dependable winter supplies for farmers, greater price pressure for consumers, more imports for the government to arrange. The distance between decision and consequence makes accountability easier to evade. An undertaking to correct a provincial account later must be tested against actual storage, river flows and time. A paper adjustment cannot restore water that is no longer available. What was released in late Kharif cannot simply be returned to storage for late Rabi. The same discipline should govern investment. Sedimentation shrinks existing reservoirs, delayed storage projects postpone benefits, and deferred canal maintenance undermines dependable delivery. The National Water Policy of 2018 provided that the water sector should receive at least 10 percent of the Federal PSDP in 2018-19, rising gradually to 20 percent by 2030. The Planning Commission's Annual Plan for 2026-27 gives water projects Rs 74.9 billion, hydel generation excluded, inside a Federal PSDP of Rs 1 trillion. That is 7.5 percent. The sector was meant to start at 10 and climb toward 20; it begins this Rabi below its own starting line. The economic comparison must include the cost of continued underperformance. Deferring maintenance can ease one department's budget while increasing farmers' pumping expenditure and the country's prospective import requirement. The apparent saving and the eventual cost appear in different accounts. The maintenance gap is measurable.

Punjab expects to collect Rs 43.6 billion in Albania this year, the water charge paid by canal users. Barely Rs 8.9 billion of it is budgeted for the maintenance of the system those users depend on, a system underpinning a farm-gate economy conservatively estimated at Rs 4 to 5 trillion. The infrastructure's replacement value runs from Rs 3 to 4 trillion; a commonly used asset-preservation rule of thumb, 2 percent a year, implies a requirement of Rs 60 to 80 billion. The shortfall does not vanish when left unspent. It accumulates as silted channels, weakened embankments and corroded gates, and returns as pumping costs, tail-end shortages and, in a poor year, import bills. A practical reform would attach an economic-risk statement to every seasonal water plan: how much production is at risk, which crops and regions are exposed, the likely effect on farm incomes and food prices, the import requirement and foreign-exchange exposure that could follow, and the alternatives considered. Departures from the plan should carry recorded reasons and an assessed consequence. That assessment should inform import preparedness and measures to protect vulnerable consumers. Food affordability must enter the discussion before a production problem becomes a purchasing emergency. The fiscal debate revolves around revenue, expenditure and borrowing; the water debate around allocations and disputes. Between them lies a resource whose management moves both the balance of payments and the household food budget. The finance ministry should not first encounter a water-management problem as a request to pay for imported wheat. Nor should the household discover its consequences only at the flour shop. By then, Pakistan is paying for an outcome it should have examined when the decision was made. n

OPINION

Can Pakistan develop its bee economy? With the country’s first hi-tech first beeswax foundation sheet manufacturing facility established, can we ramp up exports? By Usama Liaqat

B 34

ees, it is generally agreed, are wonderful. They make honey, they pollinate our crops, they have complex and intricate societies. The hardy bee works hard and is useful for many

things, including Pakistan’s economy and agriculture. And in order to amplify this latter role, recently, Pakistan’s first high-tech automatic beeswax foundation sheet manufacturing unit was inaugurated in Islamabad. A foundation sheet is a sheet which has hexagonal patterns embossed into it. It is fitted into wooden frames, which are

installed into commercial wooden hives. These wooden hives are essentially boxes made of wood and can have up to 10 of these easily removable frames. Bees are introduced into these wooden hives, where they start to build honeycombs on these foundation sheets, which because of their regularity guide the bees into building uniform and

straight combs. When the honey has been made, apiarists remove these frames and harvest honey as well as other products (including beeswax!). Beeswax foundation sheets are central to commercial beekeeping. These sheets increase yields because the bees have to spend less time building the comb from scratch. They also keep the combs regular, which can therefore easily be removed and replaced. The size of the cavities can also be altered, allowing beekeepers control over yields and bee sizes. Because these sheets serve as a strong base, they can then be put into centrifuges later where honey can easily be obtained. And since these sheets are made with beeswax, honeybees take easily to them, and can start the work they are famous for. And now we have our first “high-tech” manufacturing unit of these foundation sheets. This facility is located at the Honeybee Research Institute at the National Agriculture Research Centre at Islamabad. The establishment of this unit was done in collaboration with the Turkish Cooperation and Coordination Agency, with the aim of producing high-quality and hygienic foundation sheets. The unit would have the capacity to produce up to 450 beeswax foundation sheets per hour, and it is hoped that it would go a long way to modernize our local honey production and beekeeping practices. But, as the Federal Minister for National Food Security & Research Rana Tanveer Hussain noted, this is a part of what needs to happen to actually lead to an appreciable change in our fortunes. Not only does the production of honey in Pakistan need to be increased, but attention must be paid to other aspects of the value chain as well. Quality assurance, certification, traceability, value addition, modern packaging, and effective marketing are needed to actually capitalize on the potential of our beekeeping industry. But before we delve into the problems facing the beekeeping industry in Pakistan – which is economically useful for not only producing honey, but also for pollinating much of our agricultural produce – let us look at what beekeeping looks like in Pakistan.

Beekeeping, an Overview

n Pakistan, there are three major native bee species: the apis florea, apis cerana, and apis dorsata. The florea is the smallest, while the dorsata is the largest. While florea and dorsata prefer warmer climates and prefer trees or open locations to build their hives, the mid-sized cerana prefers colder, mountainous areas, and likes to set up hives in cavities and holes.

In the 1980s, when honey production took off as a profitable business – especially with the influx of Afghan refugees – it was apis cerana that featured as the preferred species. It was a sturdy species with high immunity but had a higher tendency to not only swarm but also to escape and abscond from commercial hives. The solution was found in the introduction of the apis mellifera, a European species of the honeybee, in 1977 after multiple failures. This species was famous for its higher productivity as well as for its gentleness and suitability to hives that had movable frames (like the one we described earlier). The result has been that the mellifera has grown to become the species of choice of commercial beekeepers in Pakistan. Another thing about beekeeping is that region and surroundings really matter. Commercial beekeepers, who have a substantial number – usually more than 200 – of hives, usually move seasonally to avoid extremes of either heat or cold. In Pakistan, for instance, they could move to Punjab in the winters and KP in the summers. Those who have smaller apiaries usually practice sedentary beefarming. But there is also another reason why these beekeepers travel, and this is because bees need flowers to extract nectar from which they will make honey. When the flowering season in one place ends, beekeepers might move to another place where the flowering season is still on, to maintain access for the bees to nectar and pollen upon which they depend for their own nutrition. So, for instance, between November and January, beekeepers might set up their hives in Southern Punjab and Sindh where the mustard crop is in swing. And once this period ends, they move northwards to where mustard again and citrus are flowering, and so on, until between April and May, they set their bee colonies around acacia trees in Punjab, KP, and Azad Kashmir. These flowers are important also because the type of flower the bees feed on to create honey determines the type of honey they produce. Some of the major ‘flavours’ of honey include those of jujuba (also known as bayr), acacia (also known as kikkar), Senegalia modesta (also known as phulai), mustard, citrus, sunflower, clover, peach blossom, olives, eucalyptus, and Granada. Multifloral honey is also produced. Of these varietis, the acacia honey is the one that is produced the most, contributing by some estimates around 53 percent of the total production. It is followed by sidr honey, which is another name for the honey harvested from jujuba or bayri trees. This accounts for around 40 percent of our local production. The other varieties make up the other 7 percent.

Honey, Production and Market

t is estimated by the All Pakistan Beekeepers and Honey Dealers Association that there are around 30,000 bee farms in Pakistan, supporting around 2 million workers. As far as the total production of honey is concerned, there is not a single agreed-upon number. Estimates range from 7,500 to 30,000 tonnes of annual production. Similarly, the number of bee colonies in Pakistan also is estimated to lie within a wide range. Depending on the estimate you use, there could be anywhere between 300,000 to 1.5 million colonies of the apis mellifera. These gaps in the estimates, which are not insubstantial, point to gaps in knowledge, regulation, and control. What can, with more certainty, be said is that most of the production happens in Punjab and KP. But even there, who takes the cake is not beyond dispute. Some estimates suggest that 60 percent of the bee colonies are located in Punjab, while according to others it is KP which produces the most honey annually. Be the case as it may, there seems to be no dispute that together these two provinces are where most honey happens in Pakistan. Within Punjab, honeybees flourish because of sequential agriculture, and the belts of jujube in Bhakkar, Layyah, Muzaffargarh, Chakwal, Mianwali, Talagang, Attock, Rawalpindi, and Jhelum region provide a key source. In KP, on the other hand, Kohat, Karak, Dera Ismail Khan, Chitral, Nowshera, Swat, Dir, Malakand, etc. are the centers of honey production. As far as the market is concerned, most of the honey produced is consumed locally. This might be through small scale beekeeping, where honey that is produced is used to satisfy household or communal demand, or it might be through medium-sized producers who sell honey locally through brands such as Young’s, Marhaba, Salman’s, Islamic Honey, Hibalife, etc. The production chain is usually dominated by middlemen or arthis, who collect honey from small beekeepers and then sell it off to wholesalers. And it is these wholesale markets which dominate local honey trade. These are mostly unregulated markets with little enforcements of standards. There has also been an increasing trend of small establishments who advertise their products directly to the consumer, claiming to be pure and organic, free of adulteration, which remains a key concern for the consumer. In fact, we even import some honey, particularly from Germany, in order to fulfill demand for high-quality honey. Here it must be mentioned that Pakistan’s per capita

AGRICULTURE

consumption of honey is around 50 grams per capita, almost a third of the global average. And since honey is not a cheap item, its usage beyond the immediate circles of small beekeepers, remains focused for niche medicinal purposes, or among the wealthier and the health-conscious circles. We do export some honey, certainly, and since 2020 our exports have risen in terms of quantities. In terms of value, however, we have seen a decrease, indicating that the price we are selling our honey for has been decreasing per unit. Most of our honey heads out to the Middle East. Most of the lucrative markets – such as the EU, the United States, and Japan – our exporters find quite hard to access, because those markets have strict quality and sanitary standards which provide against the usage of honey with certain moisture and sugar content, as well as where heating or processing has changed the composition of the honey. There are other requirements as well, but suffice it to say that we meet them not, or if we do, we meet them only in negligible quantities. So, to the Middle East goes most of our honey. In 2025, we exported a total of 4,900 tonnes of honey, of which 3,200 tonnes were meant for Saudi Arabia, 793 tonnes to the UAE, and 496 tonnes to Kuwait. And these three have remained the major destinations of our honey for a long time. Most of this honey is of the sidr variety, which is considered to be of high quality. The problem, however, is that most of what we export is through wholesale, and the importers affix their own branding and make the most of the value selling our honey in their own name in supermarkets.

Honey, the challenges

he most oft-cited challenge is that of climate change. Changing temperatures have affected the flowering patterns and seasons, with the result that productivity of local hives has been declining. Not only have the varieties of honey we produce fallen from 22 to 11, the productivity of hives has also seen a dramatic decline. Although estimates vary of what productivity once was (ranging from 80 kg per hive to 25 kg per hive), what they converge on is that productivity now has declined to around 10 kg per hive. Some also attribute this declining production to the high concentration of apiaries in smaller areas, where foraging areas for bees are reduced, depressing their productivity. Deforestation is also cited as a major cause, while others also name increasing pollution as one of the major drivers behind this decline. Yet others also name the increasing use of pesticides on crops as a significant factor behind this. The answer is likely a mix of all of these. Another issue as mentioned above is that of low quality and standards control in local production. Not only is there little enforcement of quality standards, but the local market appears to depend on that. This not only exposes local consumers to potentially adulterated products, but also might introduce them to health issues in cases where proper hygiene is not maintained. We have seen how this lack of enforcement of quality and hygiene standards cuts the effectiveness and the value of our exports. Lower quality products don’t find a market in the more lucrative economies, and the higher

quality products that we sell, we sell without the branding and marketing – especially that caters to more health-conscious western markets – that would fetch us better premiums. It is a question of value addition across the whole value chain from the equipment that is available to beekeepers to the logistics, storage and processing standards that characterise the journey of the honey from the hive to the table. This standardization would also allow us to make accurate estimates of our total production and the extent of our beekeeping industry, which would make it easier in turn to run initiatives that could actually improve our industry and practices. The advantages that might accrue to us with regards to foreign revenue, however, might not be much. The world’s biggest exporters are New Zealand and China, which earned only 281 million USD and 259 million USD in 2025. That is not a massive source of foreign proceeds, especially when we consider the trade deficit we support and bear. But there are certain other considerations. First, of course, we can do with every export that we can get dollars out of. Second, the contrast between New Zealand and China is instructive. China sells cheap honey but in massive quantities, while New Zealand sells more expensive honey in comparatively very less quantities. So, if Pakistan is able to take the New Zealand route and then increase production through a careful national program, we might eventually be able to obtain good revenues. There is another argument, as well, and that pertains to the role that bees play in sustaining the ecosystem. Pakistan’s agriculture sector is the backbone of our economy, and crops that depend on pollination such as cotton, mango, citrus, apples, sunflower, canola, peach, etc. are crucial parts of our food chain and economy. These crops greatly rely on bees for pollination, and therefore the need for the beekeeping sector to be sustainable becomes more than a simple question of the money it might bring in through exports. But even exports are one part of the economy, of course. If we consider the fact that honey is a food source in itself, and given that our honey consumption is much lower than the global averages, there is much room for the industry to grow to meet this increasing local demand as well. Beekeeping as an industry must, therefore, be protected and fostered, and the populations of these honeymakers encouraged – it is necessary to do so. Technical advancements, such as the establishment of foundation sheet manufacturing units, are a step forward. But there needs to a concerted effort under a broader climate and agricultural framework to realise the full potential of the bee economy. n

AGRICULTURE

CCP clears Fatima Fertilizer’s Agritech share acquisition

Delayed approval after the company exited the deal, exposes deep inefficiencies in Pakistan’s M&A regulatory timeline

n October 6, the Competition Commission of Pakistan (CCP) completed a Phase-I review and authorised Fatima Fertilizer Company’s acquisition of shares in Agritech Limited. By then there was little left to approve. Because during the review, Fatima told the Commission it had divested its entire shareholding in Agritech and no longer intended to pursue control of the company. The shares had been bought on the Pakistan Stock Exchange in two stages, in 2023 and 2024, and the CCP assessed both purchases together. And the loss of interest started at the beginning of 2025, yet the approval has just arrived in October 2026. To see why Fatima

bought in and why it left, it helps to go back to the company it was buying.

A troubled target

gritech began life as Pak American Fertilizer, a state plant at Daudkhel in Mianwali under the National Fertilizer Corporation. Azgard Nine bought it at privatisation in 2006. The early years were profitable: earnings peaked at Rs2 billion in 2009. It was at that time when Fauji Fertilizer made its first attempt to buy the company, but didn’t succeed. Then the gas was cut off. From 2010, following an energy crisis, the government

diverted gas from fertiliser plants to power stations and, in winter, to homes. Profit halved that year, and by September 2010 Agritech had fallen Rs3.4 billion behind on its debt repayments. In 2013, creditors won a court order to take over Azgard’s shares, raising financial institutions’ ownership to 96.26 %. National Bank of Pakistan was the largest holder with 28.2 per cent]. Bank ownership did not bring back the gas. In 2014 the plant ran for just 54 days. Between 2012 and 2022, Agritech lost about Rs4 billion a year, and excluding asset revaluations its equity reached minus Rs22 billion. Even in 2019, when the plant ran for 313 days, it lost Rs1 billion, and its auditors qualified

their opinion on whether it could ever meet its debts.

Why the suitors returned

wo policy changes turned the company around. A 2021 law let the gas regulator charge a blended price for local and imported gas, which made supply costlier but more reliable, and the government lifted the cap on fertiliser prices]. In 2023, Agritech made a Rs1 billion profit, its first since 2011, as revenue rose from Rs17 billion to Rs22 billion. The courts also sanctioned a restructuring of Rs19.5 billion in principal and Rs6.1 billion in interest. That made the company attractive. A profitable Agritech, with fixed assets of around Rs71 billion, cost a fraction of what a new plant would. One estimate put its value at Rs82,500 per tonne of capacity, against Rs238,000 per tonne to build a new plant. The liabilities came with it, though. A Rs24 billion in accumulated preference dividends and a Rs10 billion deferred tax liability. Any buyer would have to invest substantially more before seeing a return.

How Fatima’s interest began

atima’s first purchases were quiet market buys in 2023. In July 2024, it disclosed a larger plan. It told the PSX it would try to acquire Agritech’s ordinary shares, convertible and non-convertible preference shares, and zero-coupon bonds and sukuks held by banks and financial institutions. A month later, a filing subsequently showed that Fatima actually held 32.9 million Agritech shares, or 8.3 %. The filing added that the board might later authorise buying up to majority voting shares, above the legal threshold that triggers a mandatory takeover offer. But Fatima was not the only interested party. By August 2024, Maple Leaf Cement and its associate Maple Leaf Capital together held 20.584 % of Agritech, and the Maple Leaf group had three seats on Agritech’s newly constituted board.

The contest, and Fauji Group

hile this tension was building between both the companies, a third, more powerful group, swooped in and made a decisive move. On October 15, 2024, Fauji Fertilizer Company (FFC) bought 106 million Agritech shares at Rs37.42 each, raising its

holding from 2.81 % to 27.77 per cent. FFC followed with a public offer for 151 million shares at Rs38.84. Maple Leaf Cement responded with a competing bid at Rs39 for 37.86% of the company and control. FFC raised its price to Rs39.05, lifting the total value of its offer to Rs5.9 billion. And as was expected when the Fauji group entered this contest, Fauji won. Shareholders tendered only 1.48 million shares to Maple Leaf’s offer. In May 2025, FFC converted its preference shares into ordinary shares and lifted its stake to 37.36 %. Fatima finished the contest as a minority holder. Shareholder data put the Fatima Group at 7.31% of Agritech at the end of 2024. It stepped out of the contest as soon as Maple and Fauji started to lock horns. And as the CCP’s statement now confirms that Fatima Fertiliser “had divested its entire shareholding in Agritech and no longer intended to pursue control of the company”. However, it does not say when Fatima sold its shares or at what price.

Why did the CCP still rule?

ut why rule on a deal that no longer existed? The answer lies in how Pakistan’s merger law works. Under Section 11 of the Competition Act 2010 and the Competition (Merger Control) Regulations 2016, an acquisition of shares needs CCP clearance once it crosses set thresholds for assets, turnover and transaction value. For share purchases, those thresholds include the buyer ending up with more than 10 % of the target’s voting shares. The test is the size of the shareholding acquired, not whether the buyer goes on to take control. The Act also bars parties from proceeding with a merger until they have clearance. Fatima’s purchases took place in 2023 and 2024, and the CCP assessed both together. Selling the shares later did not undo those purchases. Once an application is before the Commission, it is decided by a formal order. In this case, Fatima’s divestment, which it disclosed during the review, became the decisive fact. With no shareholding left, the CCP found no risk to competition and authorised the transaction under Section 31(1)(d) (i). However the process does not necessarily have to take two years and the slow legislative process is a cost Pakistan’s corporate sector is bound to bear, across the board.

The market structure

ne would ask why the CCP went through the trouble if Fatima had pulled out long ago. But they had to, because the two companies sell

the same product. Urea makes up roughly 70 % of Pakistan’s fertiliser offtake], and a small number of companies sell nearly all of it. Figures from Arif Habib Limited for the first nine months of 2026 show: FFC (including the former Fauji Fertilizer Bin Qasim) accounts for 49.3 % of urea sales; Engro Fertilizers sells 28.1%; Fatima holds 17.6 % of the market. That leaves about 5 % smaller producers. So any market share defining acquisitions in the industry need to be evaluated by the regulator. The CCP has also looked at this market before. Its 2023 enquiry found that urea prices of Engro, FFC, Fatima and Agritech moved in parallel, which it said pointed to possible collusion, and noted that urea producers received subsidised feedstock gas. A 2025 CCP study described FFC and its subsidiary FFBL as holding a combined 48% of urea in 202122, a significantly dominant position. Agritech’s own share is small and unstable. Its August 2026 urea sales fell 78 % year on year to just 9,000 tonnes], after regional supply disruptions forced it to halt its urea plant in July. The phosphate side is simpler. Agritech markets its SSP under the Tara brand, and the company describes SSP as the cheapest source of phosphate in Pakistan. Fatima had no presence in the SSP market anyway, so the CCP found the deal left Agritech’s SSP position unchanged.

What it means for Fatima

or Fatima, the decision mainly closes the file. The company remains Pakistan’s third-largest urea seller, with 17.6 % of sales this year, up from the previous year. Had Fatima gained control of Agritech, its combined share would have been around 22 to 23 %. That would still have left it well behind both FFC and Engro, but with a second urea plant and an established SSP brand. Control of Fatima is concentrated. A 2025 credit rating report put the Fatima Group’s holding at about 59 % and the Arif Habib Group’s at about 32 %. The two groups also act together outside fertiliser: Fatima Fertilizer was part of the Arif Habibled consortium that acquired 75 % of PIA Holding Company for Rs135 billion. Fatima’s exit also changes the competition picture. The bigger question no longer concerns Fatima. The market leader, FFC, already sells about half of Pakistan’s urea and now holds 37.36 % of Agritech. Whether that stake has been reviewed completely by the CCP is not covered by this decision. n

Can the new auto-policy pass its road test?

With import tariffs being cut to a 15 % cap, the 2026–31 auto policy is planning to push a protected, nascent industry into open waters, and only the exporters will get a life jacket By Shahnawaz Ali and Shahzad Paracha

akistan is close to finalising its most significant change to auto-sector rules in a decade. The draft Automotive and Auto Parts Manufacturing Policy 2026-31 requires manufacturers to meet certain export targets, set enforceable local-content requirements, push buyers towards electric vehicles, and bring overall weighted auto tariffs below 6% by 2031. The draft has passed through several committees. According to a Ministry of Industries and Production brief seen by this magazine, it went to the Prime Minister on June 2, 2026. A committee led by the Minister for Climate Change failed to reach consensus. A sub-committee under the Minister for Power then held four meetings in mid-June before its recommendations reached the Prime Minister on June 19. He formed a further committee under the Power Minister to align the

AUTOMOBILES

draft with the National Tariff Policy 2025-30. That committee met fourteen times, and after the draft was presented again on September 7 and 9, a committee under the Minister for Law and Justice took it over and has since met seven times to finalise the policy text, contracts and legislation.

What the draft contains

P T

rofit was able to obtain a copy of the policy draft and the following is a brief list of the main measures that are going to be a part of the new policy.

Exports

he policy is mainly geared towards increasing exports by the auto industry. A duty and tax rebate scheme will be a part of the policy. The Duty and Local Taxes and Levies (DLTL) scheme is going to pay 5% baseline compensation plus 10% on

incremental exports. Moreover, a mandatory export target is to be introduced for manufacturers (OEMs) and Tier-1 parts suppliers, with penalties for missing them. A Vendor Upgradation and Technology Transfer Programme is in the works to develop parts makers. And an Export Facilitation Council will be set up to keep up with the export targets. The committee that reworked the draft has set car, jeep and SUV makers a path from zero exports in 2026-27 to 12 % of factory-gate production value by 2029-30. It projects combined vehicle and parts exports of $4.586 billion over the five years, rising from $257.44 million in 2026-27 to $1.581 billion in 2030-31.

New energy vehicles (NEVs)

he policy is also meant to change the make-up of the local auto industry, towards an environmentally friendly and less fossil fuel-reliant

mix. This means that the policy push, earlier seen in this year’s budget, is being extended in this long-term policy. This includes: • A preferential sales tax regime for locally made NEVs. • Exemption from federal excise duty, capital value tax and withholding tax up to a $75,000 price ceiling. • An Auto Development Levy on petrol and diesel cars will be applied to fund the transition. • A 5% customs duty on imported, fully built battery-electric cars priced up to $15,000 during FY2026-27 and FY2027-28. • Financing of up to Rs10 million over five years, plus support for charging and battery-swapping networks.

Localisation and buyers

o end the “screw-driver assembly” model of the current auto market, the government is planning actionable localisation targets. This means that the companies will stop getting away with assembling imported kits and passing it off as localisation. Their localisation efforts will rather have to face stricter compliance requirements. Minimum Domestic Value Addition Requirements (MDVAR) will be implemented from July 2027, and will be phased and verifiable. This replaces vague “local content” metrics with a rigid, auditable financial formula. Domestic value addition is quantified across three heavily weighted manufacturing buckets i.e; materials/parts, factory overheads, and labour. The policy also introduces contract manufacturing, so idle plant capacity can be used. It has also recognised small L6/L7 urban vehicles as affordable alternatives to motorcycles (this category includes electric vehicles that are more comparable to rickshaws than cars). 45 additional UNECE WP-29 safety regulations will now be complied with and a Pakistan Automotive Testing Institute is expected to be set up. Booking advances will now be capped at 20%, for the protection of booked prices, and curbing of “on money” (the premium charged for early delivery). Moreover, the Engineering Development Board’s manufacturing certificate is now turned into a binding 10-year agreement.

Tariffs and governance

• A substantial reduction in tariff protection for fully built (CBU) imports by 2031. • Rationalised duties on parts and raw materials. • Discretionary concession regimes issued

by statutory notification (SRO) phased out by 2029. • Auto tariffs moved from the Fifth to the First Schedule of the Customs Act by 202930. • Twice-yearly independent audits of quotas, value-addition claims and export claims. • Tougher action against misclassification and undervaluation of imported parts [2]. Apart from this, used imported cars are now facing stricter rules before import. Haroon Akhtar Khan, Adviser to the Prime Minister on Industries and Production, told the Senate Standing Committee on Industries and Production that the Personal Baggage Scheme is being abolished because of misuse. Commercial imports of used vehicles are opening under stricter rules, with a 30% additional duty falling to zero over four years. He told senators that automobile companies had not met their export targets, and said the policy would go to Parliament within two weeks. Manufacturers told the committee that thousands of CKD units were stuck at ports and accumulating demurrage charges.

Fewer Buyers, More Badges; The pretext for the new auto policy

or three decades, Pakistan’s car market answered to three Japanese names. The remedy for that was localisation. The 2016–21 policy offered tax incentives to lure new entrants into building plants and challenging the three assemblers that had operated since the early 1990s. And that bid was successful. About $1.5 billion arrived with 16 new entrants, among them KIA, Hyundai, Peugeot, MG and others. Its successor policy, the AIDEP 2021–26, was meant to turn that crowd into a functioning industry. For that purpose, this policy removed several taxes on cars up to 1,000cc to make vehicles more affordable. It also targeted deeper localisation, hybrids and EVs, and export markets. But then, the economy intervened. Problems opening letters of credit choked imports of CKD kits, led to a stalling of production and therefore exports. Analysts projected a fall in sales of 40–50 % in FY23. By then the industries ministry was already seeking a one-year delay, having missed AIDEP’s localisation and export targets. The result of these policies in tandem is a paradox. While the consumers now have more cars to choose from, none of them are cheap, and there aren’t as many consumers anymore. More than 15 firms now operate and capacity has more than doubled in a

decade. Meanwhile sales, in real terms, remain stagnant according to a latest report by Pakistan Institute of Development Economics (PIDE). Plants that were built for 600,000 units run at about half that, and sometimes even less. Even FY26, a strong recovery year, delivered just 206,445 total units. If you look at it from an investor’s point of view, this is unforgiving arithmetic. Indus Motor’s Ali Asghar Jamali notes that a $100 million investment spread over 50,000 units cannot match the cost of a similar investment spread over a million units. Meaning that to recover the cost of $100 million, the company has to charge $2000 per car if it sells 50,000 units and only $100 if it sells a million cars. What has consequently kept the new low-volume plants alive is not efficiency but protection, in the form of high duties that make imported cars dearer than local ones. The paradox is that the government themselves do not want a lot of imported cars, but it says it has to remove some of that cushion. The 2026–31 draft caps customs duties on all cars at 15 per cent by FY2030–31 and cuts the sector’s weighted average tariff from 10.6% to about 6%, while pushing exports. The newcomers will be judged on staying power, and support will only follow those who can sell abroad. One is forced to ask this question here: weren’t three or four committed giants better than 16 then? And the answer to that is no. See up until now we are discussing what would be better for the investor. What is better for the country and for the consumer is competition, albeit healthy The way it benefits the economy is that dealerships, financing and marketing are economic activity too, and competition enriches them all. Also some players have already adapted by partnering with multiple global brands to survive. Formalising that into the contract manufacturing clause that the new policy introduces, where one plant can fill its lines with several badges. We may yet enter the most interesting phase of automobile production in Pakistan.

Why shift now

fficials, meanwhile, give a more simple reason for the changing of this goalpost. The adviser told senators that years of protection has allowed manufacturers to earn high profits without any “real pressure to export”. The draft responds by making continued support conditional on exports and local value addition, rather than offering protection with no conditions. External pressure matters here too. The policy is yet to be sent to the IMF for review.

The Fund opposes preferential treatment for the auto sector and supports lower tariffs on imported parts due to its adherence to the Washington consensus. It has asked for more data before the policy proceeds. Negotiations with the IMF and the Tariff Policy Board stalled earlier this year, and the existing policy had to be extended for another year. The detailed tariff-reduction schedule in the draft reflects this pressure.

What the earlier policies tried and why they failed

ow those familiar with Pakistan’s auto market, know that some of these measures mentioned in the new policy have been before, to no

avail.

The Automotive Development Policy 2016-21 (ADP) aimed to increase competition, and it did. It brought in eight new car manufacturers, taking the total from three to thirteen. However, the new entrants mostly assembled imported kits. They brought models such as the Kia Sportage, Hyundai Tucson, Changan Alsvin and MG HS, but none broke the dominance of Toyota, Honda and Suzuki, in their respective segments. Its successor, the Auto Industry Development and Export Policy 2021-26 (AIDEP), shifted the focus to localisation and exports. Exports were meant to rise from 2 percent of imported components in 2022-23 to 10 percent by 2025-26. It also promised buyers compensation at KIBOR plus 3% if delivery was delayed by more than 60 days. The export targets were missed. The government revoked manufacturers’ licences temporarily, but they were able to obtain court stays. As early as 2023, the ministry asked for the outcome targets to be pushed back by a year. The president of the parts makers’ association has argued that both policies focused mainly on attracting new assemblers, increasing the number of brands without building localisation or engineering capability. So why did these earlier policies fail? Three explanations stand out. 1. Targets had no real enforcement. AIDEP’s own text called its export targets indicative, to be reviewed periodically. But when the government tried to enforce them by revoking licences, the courts suspended the revocations. 2. The costs were too high to compete abroad. The government can enforce an export target but an export market does not operate on a government’s wishes. To sell abroad, your industry has to produce products at competitive pricing and good quality. In an industry where more than half the car brands

have roots in China, that competitive edge is realistically very difficult to achieve from the offset. Countries with a lot more technological and competitive edge are finding it harder to compete with the Chinese market. And that is without mentioning the fundamental problems of high energy costs, high interest rates, heavy taxation and a lack of scale, that are inherent to Pakistan. The problems that continue to weaken Pakistan’s export capacity in every industry. Haroon Akhtar Khan has also said himself that export targets in the policy cannot be met without government support. 3. The domestic market was more profitable. As long as high tariffs protected local sales, exporting offered little advantage, so the companies wouldn’t have to import for survival. They were just being asked by the government to do it. The new draft addresses the first explanation directly. Targets are now to become licence conditions, the manufacturing certificate becomes a binding contract, and claims are checked by third-party audits. It also addresses the third by reducing protection on the local market. But for the second explanation, and possibly the biggest reason Pakistan is not close to becoming an export oriented country any time soon, it does far less. To be fair, it is something which is mostly outside the auto ministry’s control. But then, why would they make an entire framework that is banking on companies’ ability to export.

What the policy signals

he central change is in how success is measured. Earlier policies counted localisation achieved behind high tariffs. This one links future support to domestic value addition, exports, competition and technology. Conventional cars would need 40 % domestic value addition by 2030-31, regulatory and additional customs duties would be removed, and exporters would be reimbursed for local taxes. The draft also hedges. Akhtar told senators the government is wary of cutting tariffs too quickly, in case manufacturers switch back to importing finished cars rather than assembling them. The policy is trying to open the market and protect local assembly at the same time. On electric vehicles, the draft builds on an existing commitment. The NEV Policy 2025-30 set a target for 30% of all new vehicles sold to be electric by 2030. Car sales, meanwhile, have grown strongly. Cars, LCVs, vans and jeeps reached 206,436 units in FY26, up from 148,042.

Pakistan’s car market in 2030: what to expect

t is often difficult to predict what the outcome of a policy might be, that too for a policy that has not been finalised yet .If, however, the policy goes mostly according to plan, one can make assumptions about how the car market might look like, at the end of 2030. Afterall, the general direction a policy takes a market in, is often a toned down version of the best case scenario. Exports will be led by parts rather than cars. Pakistan does not need to export large numbers of complete cars to build an export industry, multiple analyses suggest the $700 million parts-export target is more achievable, than a $700 million car export target. Pakistan can expect parts exports to grow while vehicle makers negotiate, delay or partly miss the 12% target, as happened with earlier targets. Hybrids and plug-ins will lead the shift to cleaner cars. Plug-in hybrids have driven recent sales growth, as charging infrastructure is still limited. A 30% share of new car sales for fully electric cars by 2030 looks ambitious. If the 30% target is met, it is more likely to come from two- and three-wheelers and hybrids. Buyers will have more choice and lower prices on imports. With weighted tariffs below 6% and the used-car import duty reaching zero, cars imported both new and used should become cheaper relative to locally assembled ones, putting further pressure on the small-car segments. There may be fewer brands again. Binding localisation and export contracts is going to be costly for low-volume assemblers. By 2030, a consolidation around groups that achieve scale or have export links to parent companies abroad is a much more realistic expectation. Smaller brands, or brands based out of a much more export competitive country i.e; China, may need to reassess their investment decision for the long-haul. Buyers will have stronger protection. The 20% booking cap and price protection could reduce the “on money” premiums that have long burdened buyers, provided they are enforced. Earlier delivery-penalty promises were not consistently enforced. The approach is new for the industry i.e., support in exchange for measurable performance. Whether it works will depend on enforcement more than on the targets themselves, because enforcement is where both the earlier policies have somewhat failed. And it is where this one will make or break, because unlike the earlier two, this policy is much more painful for the industry, and will be difficult to enforce, at the same time. n

AUTOMOBILES

Bearish Blues at the PSX

Hold the line. (Or don’t; whatever)

SATIRE