About this video

• Video Title: Where to Invest in 2026? | Top 30 Investment Picks
• Channel: Sarmaaya Financials
• Speakers: Not specified in the transcript
• Duration: 02:59:23

Overview

This video provides a detailed analysis of investment opportunities in Pakistan for the year 2026, presenting a list of top stock picks across various sectors. The speaker discusses the rationale behind each pick, including company fundamentals, market position, growth potential, and associated risks, aiming to guide viewers on making informed investment decisions.

Key takeaways

• 2025 Picks Performance: The video begins by reviewing the performance of the previous year's investment picks, highlighting their exceptional returns and the accuracy of the analysis.
• Top 2026 Investment Picks: The majority of the video is dedicated to presenting and analyzing approximately 30 companies identified as promising investment opportunities for 2026.
• Company-Specific Analysis: For each stock, the speaker delves into factors like financial health (cash, debt), market share, management quality, competitive advantages, and future growth drivers.
• Risk Assessment: Potential risks associated with each investment are also discussed, providing a balanced view for investors.
• Investment Strategy: The speaker emphasizes the importance of personal research and decision-making, even when presented with stock recommendations.
• Educational Resources: The speaker promotes their "Investing Master" course as a comprehensive resource for learning investment strategies and managing risks.

Here's a breakdown of the stocks mentioned in the video, along with their discussed positives and negatives:

1. Fauji Fertilizer Company (FFC)

• Positives:
  • Lowest cost gas advantage (direct supply from Mari).
  • Strong pricing power (urea prices aligned with PSX despite lower gas cost).
  • Successful merger with FFBL, making it a DAP producer.
  • Diversified income streams from investments in power, banking (AKBL), PMP, and energy.
  • Robust balance sheet with significant net cash position.
  • Consistent high dividend payout (over 70%).
  • Long-term gas security and progress on third coal gasification for cost reduction.
  • Potential benefit from AGL's turnaround (acquisition).
• Negatives:
  • Potential risk if gas prices equalize with competitors like EFertilizer.
  • Risk of market underperformance compared to the KC Index.
  • Gas supply execution risk at AGL due to gas supply issues.
  • Risk of high inventories leading to discounted exports.
  • DAP margin normalization over the medium term.

2. Atlas Honda Limited (ATLH)

• Positives:
  • Strong correlation with agricultural sector performance, which is expected to improve.
  • Market leader in motorcycles with a strong brand and extensive dealer network (85% market share).
  • Strong volume growth, with an estimated 1.8 to 2 million units sold in 2026.
  • Favorable demand drivers: urban demand resilience and improving rural incomes.
  • High localization (up to 95%) for its popular 70cc model.
  • Strategic EV entry with long-term growth optionality.
  • Consistent dividends backed by strong cash generation ($571 per share cash).
  • Attractive valuation (5-6x P/E ratio).
• Negatives:
  • Economic sensitivity: inflation and rising interest rates could reduce purchasing power.
  • Rising competition from Chinese and new local partners.
  • Forex exchange and input cost risks due to partially imported components.
  • Regulatory risks related to duties or LCs.
  • EV execution risk and adoption rate.

3. Sazgar Engineering Works Limited (SAZEW)

• Positives:
  • Strong momentum in sales, particularly for the "Havel" model.
  • High growth expectations for Havel sales (estimated 15,000 units in 2026).
  • Leadership in SUV and hybrid segments with a 43% market share in Havel.
  • Positive impact from plug-in hybrid variants due to current market trends and potential cost savings for consumers.
  • Capacity expansion with significant capital expenditure (PKR 11.5 billion).
  • New model pipeline, including the Tang 500 and Canon Alpha.
  • Strong gross margins (29%), among the highest in the auto sector.
  • Attractive valuation (5.5-6x P/E).
  • Three-wheeler dominance with significant export market share (71%).
• Negatives:
  • Economic sensitivity: inflation and interest rates could impact sales.
  • Rising competition from Chinese brands and new local players.
  • Forex exchange and input cost risks due to partially imported components.
  • Potential policy risks related to the auto policy ending in 2026.
  • EV adoption and execution risk.
  • Maturity risk for the auto policy, although new EV policies might benefit the company.

4. Indus Motor Company (INDU)

• Positives:
  • Strong brand reputation for Japanese vehicles (Toyota).
  • Consistent sales growth for models like Corolla and Civic.
  • Security due to high localization and a strong dealer network.
  • Robust volume recovery, with sales expected to reach 44,000 units in 2026.
  • Benefit from upcoming EV policy and Toyota's global hybrid portfolio.
  • Diversified product range including sedans, SUVs, pickups, and commercial vehicles.
  • Strong balance sheet with significant net cash (PKR 99 billion), translating to high cash per share.
  • Attractive valuation (5.5-6x P/E) and dividend yield (9-10%).
  • Strong earnings growth (EPS tripled in 4-5 years).
• Negatives:
  • Potential for market underperformance if newer models or brands gain more traction.
  • Competition from new entrants and imported used vehicles.
  • Risk of margin normalization due to tariff rationalization and lower price points.
  • Currency depreciation could increase costs for imported components.

5. Nishat Power Limited (NPL)

• Positives:
  • Expected benefit from the "Jacco" car, which it is responsible for bringing to Pakistan.
  • 33% market share in the next generation of vehicles in Pakistan.
  • Significant cash reserves (PKR 9.6 billion) providing financial flexibility.
  • Company is diversifying investments into other companies.
  • Tax transaction earnings shift due to government incentives for hybrid tech.
  • Strong liquidity and dividend history.
  • Expected EPS growth in FY26 and FY27.
• Negatives:
  • High stock price surge, potentially indicating overvaluation.
  • The company is a power producer, and its power contracts have ended, leading to diversification into other investments.
  • Slightly lower cash per share compared to some other companies.
  • Potential headwinds if the "Jacca" car launch doesn't meet expectations.

6. The Searle Company Limited (SEARL)

• Positives:
  • 80% of its portfolio consists of non-essential drugs, allowing for price adjustments.
  • High gross margins (56%), among the highest in the pharmaceutical sector.
  • Sustainable margin expectations for 2026.
  • Introduction of new products to boost sales.
  • Divestment of a 50% stake in A1/CCMT/Volition is expected to provide proceeds and improve the balance sheet.
  • First Pakistani pharma registered in the UAE and product launches in Canada.
  • Export target of $3-4 billion by FY30.
  • Fifth largest pharma in Pakistan with over 200 products in development.
  • Debt-free with strong cash flows.
  • Dominant OTC brands like Panadol, Centrum, and others.
  • Focus on health care segments like diabetes and obesity.
  • Expansion into new facilities (Jamshoro) to increase capacity.
  • Potential benefit from the turnaround of AGL (AgriTech Limited).
• Negatives:
  • Valuation is considered slightly expensive.
  • Risks associated with API price volatility and supply chain disruptions.
  • Potential impact from regulations on duties or LCs.
  • Risk if new product launches face stiff competition.
  • Risk from potential delays in expansion projects.
  • API price volatility and supply chain disruptions.

7. Haleon Pakistan Limited (HALEON)

• Positives:
  • Strong brand recognition, particularly for Panadol, a widely consumed product.
  • Introduction of new Panadol variants (pain, migraine, ultra, night) categorized as non-essential drugs, allowing for price increases.
  • Centrum launch expected to perform well, tapping into the health supplements market.
  • Drive into OTC and wellness segments with significant revenue potential ($1.7 billion).
  • Margin uplift expected due to deregulation.
  • Capacity expansion in Jamshoro for Panadol production.
  • Focus on high-margin products and exports.
  • Strong financial position with no debt and robust cash flow.
  • Dominant OTC brand with a strong product portfolio.
• Negatives:
  • Valuation is considered slightly expensive.
  • Risks are similar to SEARL, including API price volatility and supply chain issues.
  • Potential for lower-than-expected adoption of new product categories.

8. Maple Leaf Cement Factory Limited (MLCF)

• Positives:
  • Cement sector seen as a strong performer for 2026, especially for northern plants.
  • Cost advantage from efficient ASU and renewable energy usage (solar, waste heat).
  • Petcoke flexibility and rail connectivity reduce transportation costs.
  • Premium product mix, with 90% market share in white cement.
  • Strong brand loyalty, particularly in the north.
  • Potential for margin expansion due to improved fuel mix and softer coal prices.
  • Diversification into health care (Nova Care Hospital) and potential benefits from AGL's turnaround.
  • Attractive valuation (9-10x P/E), trading at a discount to the sector.
• Negatives:
  • Low dividend payout.
  • Potential delays in approvals for the Pioneer Cement deal.
  • Coal price volatility.

9. Lucky Cement (LUCK)

• Positives:
  • Strong management perceived as highly competent and visionary.
  • Diversified business model with significant diversification across sectors.
  • Leading producer of cement in Pakistan with a substantial domestic market share (16%) and export share (36%).
  • Cost energy advantage due to efficient operations and renewable energy integration.
  • Second lowest cost producer in Pakistan.
  • Expansion plans in Iraq and Congo with good demand.
  • Diversification into automobiles and mining (33% stake in National Resources Limited for copper, gold, zinc exploration).
  • Strong financial performance and growth trajectory.
• Negatives:
  • While strong, might not necessarily beat the market in terms of sheer stock price appreciation, but offers stability.

10. Pak Electron Limited (PAEL)

• Positives:
  • Recovery in appliances demand and improving economic outlook supports appliance sales.
  • Dominant market share (90%) in power transformers.
  • Partnerships with global players like Panasonic for expansion.
  • Improving earnings and attractive valuations.
  • Benefits from the upcoming EV policy and potential for increased demand for electrical components.
  • Sales are seasonal, with higher demand in summers.
  • Strong earnings momentum and improved profitability.
• Negatives:
  • Raw material price volatility due to reliance on imports could impact costs.
  • Sales are seasonal, with lower demand in winters, requiring careful timing of investments.

11. Pakistan State Oil (PSO)

• Positives:
  • Significant free float acquisition by mutual funds (44-47%) suggests potential future price appreciation.
  • Strong cash recovery and receivables expected to improve cash flow.
  • Increased margins for Oil Marketing Companies (OMCs) by the government.
  • Market share leadership (46%) in fuel marketing.
  • Benefit from economic rebound leading to increased fuel demand.
  • Extensive network of 3600+ outlets.
  • Working capital relief from gas reforms and potential savings from using local energy sources.
  • Strategic optionality in EV charging outlets and storage expansion.
  • Attractive valuation (low P/E ratio).
• Negatives:
  • Geopolitical events (US-Venezuela relations) could impact international oil prices and demand.
  • Potential risk of oil price stagnation or decrease due to increased supply from Venezuela.
  • Inventory losses can occur if oil prices fall.
  • Potential for circular debt delays impacting cash flow.
  • Past underperformance compared to the market.

12. Systems Limited (SYS)

• Positives:
  • Strong management and a significant asset in Pakistan's IT sector.
  • Excellent revenue growth and expanding market presence internationally (MENA region, North America, Europe).
  • Diversified business verticals (PFSI, Telecom, Retail, CPG, AI, Cloud).
  • High export earnings, benefiting from a strengthening USD against PKR.
  • Successful diversification and acquisitions (e.g., British American Tobacco's IT services).
  • Strong cash position (PKR 10.2 billion).
  • Projected high EPS growth for 2026.
  • Focus on digital transformation, AI, and cloud services.
  • Strategic expansion into the MENA region, aligned with Saudi Vision 2030.
  • Reduced client payment delays through improved business practices.
• Negatives:
  • Susceptible to currency fluctuations: a strengthening PKR could negatively impact earnings.
  • Potential delays in Middle Eastern expansion projects.
  • Execution risk in new markets and projects.

13. AGP Limited (AGP)

• Positives:
  • Strong growth in sales, particularly driven by recovering demand in the pharmaceutical sector.
  • High margins (51%) among the best in the pharmaceutical category.
  • Considered a fundamentally strong stock with growth potential.
  • Strategic partnerships and product launches expected to boost revenue.
  • Potential for margin expansion due to deregulation of non-essential drug prices.
  • Strong historical performance and consistent sales growth.
• Negatives:
  • While good, might not significantly outperform the market in 2026.
  • Potential for API price volatility and supply chain disruptions.

14. International Steels Limited (ISL)

• Positives:
  • Leading Pakistani flat steel producer serving various industries like appliances, two-wheelers, and three-wheelers.
  • Expected benefit from agricultural sector growth and increased demand for steel.
  • Strong export performance to over 30 countries.
  • Domestic demand recovery driven by improved purchasing power and auto/transport activity.
  • Benefit from anti-dumping duties on imported steel, improving domestic competitiveness.
  • Capacity expansion and focus on higher-margin value-added steel products.
  • Participation in mining ventures (Recod) providing long-term growth options.
  • Strong balance sheet with low debt and significant cash per share.
  • Improved margins expected due to energy efficiency and tax benefits.
• Negatives:
  • Demand sensitivity to construction slowdowns.
  • High debt-to-equity ratio (though improving).
  • Potential for policy risks and smuggling impacting market dynamics.
  • Execution risks and delays in capital expenditure projects.
  • Penalized by the Competition Commission of Pakistan, though the impact is deemed minor.

15. Mughal Iron and Steel Industries Limited (MUGHAL)

• Positives:
  • Leader in the production of girders and sections, with a dominant share in high-margin products.
  • Expected steel demand recovery and growth in long steel products.
  • Cost efficiency from captive power plants (36.5 MW coal captive power plant) and renewable energy integration.
  • BMR initiatives improving operational efficiency.
  • Value-added ferrous products and 100% value addition.
  • Cost advantage in scrap metal sourcing.
  • Diversified business model, including involvement in mining and automotive sectors.
  • Strong financial performance and revenue growth.
• Negatives:
  • Higher debt-to-equity ratio compared to ISL.
  • Demand sensitivity to construction slowdowns.
  • Potential for policy risks and smuggling impacting the sector.
  • Execution risks related to BMR projects and capital expenditure.

16. United Bank Limited (UBL)

• Positives:
  • Considered a top bank pick due to strong deposit growth (69% YoY in Q3 FY25).
  • Industry-leading deposit mobilization and market share (13%).
  • High current account ratio (50%) and significant zero-cost deposits.
  • Structurally low funding costs and strong Net Interest Margins (NIMs).
  • Robust investment book and asset-liability management (ALM).
  • Extensive branch network (1800+ branches).
  • Strong earnings momentum and consistent dividend payouts.
  • Excellent quarterly performance with significant net interest income growth.
  • High Capital Adequacy Ratio (CAR).
• Negatives:
  • Price-to-earnings (P/E) ratio is slightly higher than some peers.
  • Potential for increased competition impacting margins.

17. National Bank of Pakistan (NBP)

• Positives:
  • Good deposit growth, though lower than UBL.
  • Potential for a base effect driving earnings growth in the next quarter due to one-time gains in the previous year.
  • Attractive valuation and affordability compared to other banks.
  • Strong investment book.
• Negatives:
  • Slower deposit growth compared to industry leaders like UBL and Mzan Bank.
  • Net interest income growth has been less impressive than peers.
  • Risk of earnings stagnation or decline if the base effect fades and growth doesn't materialize.

18. Meezan Bank Limited (MEBL)

• Positives:
  • Industry-leading Islamic banking franchise with a strong brand.
  • Exceptional deposit mobilization with a 33% CAGR.
  • High current account ratio (49%), targeted to exceed 50%.
  • Low cost of funds (4.5%) and strong Net Interest Margins (NIMs).
  • Strong financial performance and growth trajectory.
  • Aggressive branch network expansion.
  • High Capital Adequacy Ratio (CAR).
  • Expanding remittance business and digital banking initiatives.
• Negatives:
  • Lower deposit growth in Q3 FY25 compared to some other banks.
  • Earning growth has been slower compared to some peers.
  • Potential for margin compression due to competition and regulatory changes (MDR, minimum deposit ratios).

19. Shifa International Hospital Limited (SHFA)

• Positives:
  • Steady revenue and earnings growth.
  • Strong cash position.
  • Expansion plans including a new hospital in Faisalabad, expected to be a significant growth driver.
  • Improved operating leverage and margins.
  • Disciplined capital expenditure and a strong balance sheet.
  • Lean medical tourism model with potential for international patient inflow.
  • Strong financial performance and positive growth outlook.
• Negatives:
  • Hospitals are generally considered cyclical and sensitive to economic downturns.
  • Execution risk and delays in expansion projects.
  • Higher-than-planned capital expenditure could strain the balance sheet.

20. National Foods Pakistan (NATF)

• Positives:
  • Strong brand portfolio and market leadership in segments like ketchup.
  • Significant export revenue contributing to international market presence.
  • Vertical integration (seed-to-table initiative for tomatoes) reducing import reliance and controlling costs.
  • Strong growth in sales and profits, with revenues doubling and net profit tripling in recent years.
  • Improved margins (30%) due to cost management and operational efficiencies.
  • Innovation in product categories (e.g., "Drizzle" sauces).
  • Diversification of earnings through various product lines and international markets.
  • Potential for significant value unlocking through divestment of stake in A1 Carrytrade.
  • Strong balance sheet with reduced debt and solid cash flow.
• Negatives:
  • Company's own diversification efforts (e.g., apparel business) had initial losses, though recovery is expected.
  • Potential impact on margins if raw material costs become volatile.

21. Ghani Chemical Industries Limited (GCIL)

• Positives:
  • Industry-leading margins (49%) and cost advantages from efficient ASU and tax exemptions.
  • Contract-based revenue ensures stability.
  • Expansion of capacity and entry into new business areas like LPG through joint ventures.
  • Participation in Special Economic Zones offering tax benefits.
  • Strong financial performance with consistent growth.
  • Potential benefit from a revival in industries like textiles, auto, and shipping.
  • Attractive valuation (8.6x P/E), trading at a discount to peers.
  • Benefit from participation in Mari Energy's joint venture for LNG infrastructure.
• Negatives:
  • Potential risk from electricity tariff increases.
  • Execution risks and delays in expansion projects.
  • Sensitivity to economic recovery and demand fluctuations in client industries.

22. Service Industries Limited (SRVI)

• Positives:
  • Strong revenue growth (30% YoY) driven by the tire and tube segment.
  • Expected IPO of its subsidiary, Long March Tires, to unlock value.
  • Export growth, benefiting from a strengthening USD.
  • Expansion of tire capacity and introduction of new product categories.
  • Lower interest rates reducing finance costs.
  • Improved operating efficiency and margins.
  • Potential for significant earnings growth from its tire business.
• Negatives:
  • High leverage (debt-to-equity ratio).
  • Execution risk in new business ventures and joint ventures.
  • Potential impact from currency depreciation if costs rise significantly.
  • Lower sales from the apparel segment (though recovery is expected).

23. Pakistan Stock Exchange (PSX)

• Positives:
  • Expected increase in trading volumes and activity due to market growth and investor participation.
  • Transition to T+1 settlement system to improve liquidity and settlement times.
  • Significant increase in daily traded volumes and active users.
  • Growth drivers include upcoming IPOs, product expansion, and technological upgrades.
  • Strong revenue and profit growth, benefiting from higher fees and commissions.
  • Monopoly position in Pakistan's stock market.
  • No debt and strong operational leverage.
• Negatives:
  • Stock price has already appreciated significantly, potentially making it less attractive for new investors.
  • Sensitivity to macroeconomic stability and investor sentiment.

24. Pakistan Petroleum Limited (PPL)

• Positives:
  • Potential for performance improvement driven by valuation rather than immediate earnings growth.
  • Significant cash receivables are expected to improve cash flow.
  • Strong balance sheet and potential for capital expenditure and higher payouts.
  • Dividend yield is stable (5-6%).
  • Increased exploration momentum and reserve replacement ratio.
  • Discovery of new wells and planned drilling activities.
  • Diversification into mining ventures (Recod) and offshore blocks (Abu Dhabi).
  • Potential benefit from improved gas containment and LNG surplus.
• Negatives:
  • Earnings growth is not expected to be strong in the short term.
  • Gas containment issues at SAGP could affect production recovery.
  • Susceptible to international oil price volatility and PKR depreciation.
  • Circular debt delays could impact cash flow.

25. Ittehad Chemicals Limited (ICL)

• Positives:
  • Strong market position as an old and large producer of Chlor-Alkali products.
  • Major catalyst from biomass power generation (37.2 MW) improving margins significantly.
  • Power costs reduced due to efficient energy mix (50-50 power mix).
  • Capacity expansion in caustic evaporation plants.
  • Potential for margin expansion due to cost efficiencies and tax exemptions.
  • Contract-based revenue provides stability.
  • Diversification into LPG through joint ventures.
  • Attractive valuation (28x P/E) with expected EPS growth.
• Negatives:
  • High power input costs can impact margins if not managed effectively.
  • Execution risk for biomass power project implementation.
  • Demand sensitivity to caustic soda prices and industrial demand fluctuations.

26. Interloop Limited (ILP)

• Positives:
  • Diversified business model spanning footwear, tires, and tubes.
  • Strong revenue growth driven by the tire and tube segment.
  • Expected IPO of its subsidiary, Long March Tires, to unlock value.
  • Significant export revenue, benefiting from a strengthening USD.
  • Vertical integration in its textile business (seed-to-table for tomatoes) to reduce import reliance and costs.
  • Expected improvement in margins and earnings from apparel segment recovery.
  • Strong client base including global brands like Adidas, H&M, Amazon.
  • Leading exporter of hosiery and apparel.
• Negatives:
  • Apparel segment currently incurs losses, though recovery is anticipated.
  • High leverage (debt-to-equity ratio).
  • Execution risks in new ventures and potential delays in expansion projects.
  • Potential impact from currency depreciation if input costs rise.

27. Agriauto Industries Limited (AGIL)

• Positives:
  • Turnaround company showing strong earnings growth and margin recovery.
  • Higher volumes and improved net sales (39% increase).
  • Negotiated better margins with OEMs.
  • Potential for continued improvement in margins and earnings.
  • Benefit from localization opportunities and strong OEM relationships.
  • Sales expected to remain stable, supporting earnings.
• Negatives:
  • The company is susceptible to auto sector slowdowns.
  • Potential for increased competition in auto parts.

28. Pakistan State Oil (PSO) - Mentioned again in context of oil and gas sector.

• Positives:
  • Significant free float acquisition by mutual funds.
  • Strong cash recovery and receivables.
  • Government increase in OMC margins.
  • Market share leadership.
  • Benefit from economic rebound and increased fuel demand.
  • Extensive outlet network.
  • Strategic optionality in EV charging and storage.
  • Attractive valuation.
• Negatives:
  • Geopolitical impact on international oil prices.
  • Potential for oil price stagnation due to increased supply from Venezuela.
  • Inventory losses if oil prices fall.
  • Circular debt delays impacting cash flow.
  • Past underperformance.

29. Pakistan Petroleum Limited (PPL) - Mentioned again in context of oil and gas sector.

• Positives:
  • Potential for valuation-driven performance.
  • Significant cash receivables improving cash flow.
  • Strong balance sheet supporting capex and payouts.
  • Stable dividend yield.
  • Increased exploration momentum and reserve replacement ratio.
  • Diversification into mining and offshore blocks.
  • Potential benefit from improved gas containment.
• Negatives:
  • Earnings growth not expected to be strong in the short term.
  • Gas containment issues at SAGP affecting production.
  • Susceptible to oil price volatility and PKR depreciation.
  • Circular debt delays impacting cash flow.

30. United Bank Limited (UBL) - Mentioned again in Q&A section.

• Positives:
  • Top bank pick due to strong deposit growth.
  • Industry-leading deposit mobilization.
  • High current account ratio and zero-cost deposits.
  • Low funding costs and strong NIMs.
  • Robust investment book and ALM.
  • Extensive branch network.
  • Strong earnings momentum and dividends.
  • Excellent quarterly performance.
  • High CAR.
• Negatives:
  • Higher P/E ratio compared to some peers.
  • Potential for increased competition impacting margins.

31. Meezan Bank Limited (MEBL) - Mentioned again in Q&A section.

• Positives:
  • Industry-leading Islamic banking franchise.
  • Exceptional deposit mobilization.
  • High current account ratio.
  • Low cost of funds and strong NIMs.
  • Strong financial performance.
  • Aggressive branch expansion.
  • High CAR.
• Negatives:
  • Lower deposit growth in Q3 FY25 compared to peers.
  • Slower earning growth compared to some peers.
  • Potential for margin compression.

32. Shifa International Hospital Limited (SHFA) - Mentioned again in Q&A section.

• Positives:
  • Steady revenue and earnings growth.
  • Strong cash position.
  • Expansion plans, especially the Faisalabad hospital.
  • Improved operating leverage and margins.
  • Disciplined capital expenditure and strong balance sheet.
  • Lean medical tourism model.
  • Strong financial performance.
• Negatives:
  • Cyclical industry sensitive to economic downturns.
  • Execution risks in expansion.
  • Higher capital expenditure could strain the balance sheet.

33. Pakistan Stock Exchange (PSX) - Mentioned again in Q&A section.

• Positives:
  • Expected increase in trading volumes and activity.
  • Transition to T+1 settlement.
  • Strong user growth.
  • Drivers include IPOs, product expansion, and tech upgrades.
  • Strong revenue and profit growth.
  • Monopoly position.
  • No debt.
• Negatives:
  • Already appreciated significantly.
  • Sensitivity to macroeconomic stability.

34. Pakistan Petroleum Limited (PPL) - Mentioned again in Q&A section.

• Positives:
  • Potential for valuation-driven performance.
  • Receivables expected to improve cash flow.
  • Strong balance sheet.
  • Stable dividend yield.
  • Increased exploration momentum.
  • New well discoveries and planned drilling.
  • Diversification into mining and offshore blocks.
• Negatives:
  • Earnings growth not expected to be strong short-term.
  • Gas containment issues affecting production.
  • Susceptible to oil price volatility and PKR depreciation.
  • Circular debt delays impacting cash flow.

35. Ittehad Chemicals Limited (ICL) - Mentioned again in Q&A section.

• Positives:
  • Strong market position in Chlor-Alkali.
  • Margin improvement from biomass power generation.
  • Reduced power costs.
  • Capacity expansion.
  • Potential margin expansion from tax exemptions.
  • Contract-based revenue.
  • Diversification into LPG.
  • Attractive valuation and expected EPS growth.
• Negatives:
  • High power input costs.
  • Execution risk for biomass power project.
  • Demand sensitivity to caustic soda prices.

36. Interloop Limited (ILP) - Mentioned again in Q&A section.

• Positives:
  • Diversified business: footwear, tires, tubes.
  • Strong revenue growth from tires/tubes.
  • Expected IPO of subsidiary (Long March Tires).
  • Export growth benefiting from USD strength.
  • Vertical integration in textiles reducing import reliance.
  • Expected improvement in apparel segment margins.
  • Strong global client base.
  • Leading exporter of hosiery and apparel.
• Negatives:
  • Apparel segment currently loss-making.
  • High leverage.
  • Execution risks in new ventures.
  • Potential impact from currency depreciation.

37. Agriauto Industries Limited (AGIL) - Mentioned again in Q&A section.

• Positives:
  • Turnaround company with strong earnings growth and margin recovery.
  • Higher volumes and net sales.
  • Negotiated better margins with OEMs.
  • Potential for continued margin and earnings improvement.
  • Benefit from localization opportunities.
• Negatives:
  • Susceptible to auto sector slowdowns.
  • Potential for increased competition.

38. Ghani Chemical Industries Limited (GCIL) - Mentioned again in Q&A section.

• Positives:
  • Industry-leading margins and cost advantages.
  • Contract-based revenue.
  • Capacity expansion and diversification into LPG.
  • Benefits from Special Economic Zones.
  • Strong financial performance.
  • Potential benefit from revival in client industries.
  • Attractive valuation.
  • Benefit from Mari Energy joint venture.
• Negatives:
  • Potential risk from electricity tariff increases.
  • Execution risks in expansion.
  • Sensitivity to economic recovery.

39. Service Industries Limited (SRVI) - Mentioned again in Q&A section.

• Positives:
  • Strong revenue growth (30% YoY) from tires/tubes.
  • Expected IPO of subsidiary to unlock value.
  • Export growth benefiting from USD strength.
  • Expansion of tire capacity and new product categories.
  • Lower interest rates reducing finance costs.
  • Improved operating efficiency and margins.
  • Potential for significant earnings growth.
• Negatives:
  • High leverage.
  • Execution risk in new ventures.
  • Potential impact from currency depreciation.

40. Pakistan Stock Exchange (PSX) - Mentioned again in Q&A section.

• Positives:
  • Expected increase in trading volumes.
  • Transition to T+1 settlement.
  • Strong user growth.
  • Drivers include IPOs, product expansion, and tech upgrades.
  • Strong revenue and profit growth.
  • Monopoly position.
  • No debt.
• Negatives:
  • Already appreciated significantly.
  • Sensitivity to macroeconomic stability.

41. Pakistan Petroleum Limited (PPL) - Mentioned again in Q&A section.

• Positives:
  • Potential for valuation-driven performance.
  • Receivables expected to improve cash flow.
  • Strong balance sheet.
  • Stable dividend yield.
  • Increased exploration momentum.
  • New well discoveries and planned drilling.
  • Diversification into mining and offshore blocks.
• Negatives:
  • Earnings growth not expected to be strong short-term.
  • Gas containment issues affecting production.
  • Susceptible to oil price volatility and PKR depreciation.
  • Circular debt delays impacting cash flow.

42. Ittehad Chemicals Limited (ICL) - Mentioned again in Q&A section.

• Positives:
  • Strong market position in Chlor-Alkali.
  • Margin improvement from biomass power generation.
  • Reduced power costs.
  • Capacity expansion.
  • Potential margin expansion from tax exemptions.
  • Contract-based revenue.
  • Diversification into LPG.
  • Attractive valuation and expected EPS growth.
• Negatives:
  • High power input costs.
  • Execution risk for biomass power project.
  • Demand sensitivity to caustic soda prices.

43. Interloop Limited (ILP) - Mentioned again in Q&A section.

• Positives:
  • Diversified business: footwear, tires, tubes.
  • Strong revenue growth from tires/tubes.
  • Expected IPO of subsidiary to unlock value.
  • Export growth benefiting from USD strength.
  • Vertical integration in textiles reducing import reliance.
  • Expected improvement in apparel segment margins.
  • Strong global client base.
  • Leading