The KSE-100 broke its own record from the previous year to post all-time high earnings in FY22 of Rs. 1,021 billion despite being a turbulent year in terms of change in economic policy and domestic response to the spate of global demand-supply disruptions resulting from post-COVID jitters and Russia Ukraine war.
Profitability increased soundly by 17 percent YoY, according to a study by Arif Habib Limited (AHL), which is nonetheless notable given the severity of turmoil during the year.
The research also emphasizes that earnings might have been significantly higher had the previous administration not enacted a super tax, which resulted in a startling 39 percent YoY rise in PBT during FY22.
The 83 firms that have released their findings are included in the study; the other 17 companies have not yet done so. Nearly 90,4% of the market capitalization of the benchmark bourse is made up by the firms covered in the study.
Although modest at just 3 percent to Rs. 253 billion, the benchmark bourse’s earnings rise in FY22 was led by the sector’s heavyweight, Commercial Banks, which was the result of asset repricing after interest rates were raised. The installation of a significant super tax reduced the PBT increase, which was 25 percent YoY.
With increased oil prices and exchange gains achieved during PKR depreciation, the index-weighted Oil and Gas Exploration sector came next (+30% YoY to Rs. 246 billion).
With increased retention prices throughout the year to offset the effects of volumetric loss (-8 percent YoY), higher coal costs, hikes in electricity tariffs, and PKR devaluation, the cement industry also reported profitability growth of a solid 28% YoY to Rs. 55 billion.
The automobile industry also continued to be cyclical, benefiting from a sharp increase in pricing to pass along the effects of rising steel prices, depreciating the Pakistani rupee, and volumetric growth (profits growth of 5% YoY to Rs. 31 billion).
The Chemical sector’s profitability increased by 25% YoY to Rs. 39 billion thanks to greater foreign margins, PKR devaluation, and volumetric growth (EPLC’s expansion went online). The Textile Composite industry (+83 percent YoY to Rs. 27 billion) was another one that benefited from a higher US dollar.
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