Profit E-Magazine Issue 373

Thatta Cement wants to assemble Belarussian tractors in Balochistan

Slowly, PSO’s cash flow position is improving

After slowdown in 2025, Airlink gearing up for major expansion in 2026

NEPRA trims K-Electric’s tariffs on lower cost assessments

Can AKD’s Arkadians rise after legal victory?

Publishing Editor: Babar Nizami - Editor Multimedia: Umar Aziz Khan - Senior Editor: Abdullah Niazi

Editorial Consultant: Ahtasam Ahmad - Business Reporters: Taimoor Hassan | Shahab Omer

Zain Naeem | Saneela Jawad | Nisma Riaz | Mariam Umar | Shahnawaz Ali | Ghulam Abbass

Ahmad Ahmadani | Aziz Buneri - Sub-Editor: Saddam Hussain - Video Producer: Talha Farooqi Director Marketing : Muddasir Alam - Regional Heads of Marketing: Agha Anwer (Khi) Kamal Rizvi (Lhe) | Malik Israr (Isb) GM Special Projects Zulfiqar Butt - Manager Subscriptions: Irfan Farooq

Pakistan’s #1 business magazine - your go-to source for business, economic and financial news. Contact us: profit@pakistantoday.com.pk

BRINGING BIOTECH TO PAKISTAN

FEROZSONS, AND NOW ITS SUBSIDIARY BF BIOSCIENCES, ARE BETTING THAT THE PAKISTANI MARKET IS READY FOR CUTTING EDGE LIFE SCIENCES PRODUCTS. ARE THEY RIGHT?

By Zain Naeem

The hierarchy of innovation in life sciences is clear: innovation happens almost entirely in the United States, the market that allows for the highest prices, and from there migrates first to Europe, Canada, and Japan, and from there on to India, China, and then the rest of the world, if ever it gets that far. Pakistan has historically been very much an “end of the list” market. A product would only ever get to Pakistan long after its patents had expired.

What would it take to get innovation to Pakistan not just during the patent period, but around the same time that the technology is spreading from the United States to Europe and Japan? What would it take to place Pakistan at that second tier of countries?

That is the question Ferozsons has asked itself, and has had some degree of success with as a corporate strategy. The company is one of the fastest growing pharmaceutical companies in Pakistan, and has been able to bring some of the most innovative life sciences products to Pakistan – at price points the Pakistani consumer can afford.

Healthcare in Pakistan tends to be uncomplicated: two thirds of healthcare spending in Pakistan consists of purchasing drugs, and the majority of those tend to be generic medications treating very basic conditions - antibiotics, antiallergens, cough medicine, pain medication, etc.

But Ferozsons has brought leading hepatology drugs to the Pakistani market, including a full cure for hepatitis C, and is now bringing GLP-1 drugs to the market as well.

What gave Ferozsons this ambition? A Harvard-educated CEO certainly helps, though the company has been helped by a market environment where few are willing to take risks, but the most innovative life sciences company are willing to partner with companies in places like Pakistan that are willing to live up to their standards.

But let us start with how Ferozsons began.

Ferozsons and its origins

The story of Ferozsons starts in 1894 before the country came into existence. The lineage of the company traces itself back when Maulvi Ferozuddin Khan set up a publishing house in Lahore which was focused on publishing books and educational materials.

When many try to follow profits, Ferozuddin Khan wanted to serve the under-privileged population of the subcontinent by playing his part in the development of the healthcare and education sectors. This culminated in the pharmaceutical company coming into existence in 1956.

Ferozsons was one of the earliest companies that started to manufacture pharmaceutical products domestically. By 1960, the company had gotten listed on the stock market as well.

The reason behind the success has been the fact that it is the first mover in the sector as it has local knowledge and research while it looks towards local manufacturing ambition. From very early on, there was a focus to carry out manufacturing and get regulatory compliance for the

products that were being produced. As the production started to scale up, there was a need to develop distribution networks that could reach the customers in the most efficient manner. By providing quality products, Ferozsons was able to build a brand around its name.

While Ferozsons was spreading its roots, the biggest opportunity on hand was the fact that the country had been partitioned recently and lacked the foreign reserve or the industrial capability to sustain imports for a long period of time. Locally produced products were able to meet the local demand which allowed for quality healthcare to be provided while not relying on costly and uncertain imports.

Challenges faced by the industry

In usual circumstances, the biggest challenge a private company faces is in terms of competitors who start to enter the market. In this situation as well, many foreign companies started to enter the market and started to make operations difficult. However, the biggest challenge that was faced by Ferozsons was the fact that the government started to tighten its grip on the whole industry.

The problem here is the perception of the medical industry in the country. While in many countries, the pharmaceutical industry is allowed to set their own prices, in Pakistan, this motive is demonized and targeted. The government feels that these companies are providing a public good rather than a consumer good which means that they need to control their prices. Rather than allowing them to make a profit, the government wants to make sure that the prices are not allowed to get out of hand. In order to keep things under control, the prices are mandated by the government.

The first formalization of this policy was back in 1976 when the Drug Act was promulgated under Zulfiqar Ali Bhutto. The tentacles of the disastrous nationalization led to the Drug policy being put into place as well. The intentions of this policy were good. To make sure that patients had access to cheap and affordable drugs which were of high quality. In addition to capping the prices set, there was also a requirement to make sure a part of the profits was put away for research purposes.

This regulation was left lacking as it failed to provide a formula that could be applied in the future where prices could be revised or increased in line with the costs of production. The implementation of this policy meant that the company had no control over its prices and could do little in the way of increasing their margins.

The aftershocks of this policy started to showcase their impact in recent decades when the number of multinationals involved in pharmaceuticals has more than halved from 48 to 22. Companies like Merck Sharp & Dohme, Bristol Myers Squibb, ICI, Roche Pakistan, Merck Group, Eli Lilly and Johnson & Johnson ended up leaving the country never to return.

After passing of the 18th Amendment, the DRAP Act of 2012 was passed which established the Drug Regulatory Authority of Pakistan (DRAP). The role of the regulatory body was to oversee the licensing, approval and pricing

of the pharma industry. There was also going to be a Drug Pricing COmmittee set up by DRAP which would formulate the drug pricing strategy and would recommend prices to be approved by the Federal Cabinet. In essence, the control of the price was still with the regulatory authority. The only opportunity that was being provided was for the drug manufacturer to approach DRAP in order to get an increase in price.

In 2018, this policy was further relaxed to classify drugs into essential and non-essential drugs which had varying price increases which were applicable on them. In 2024, the government finally deregulated all prices for non essential medicines while still holding onto the control for essential medicines.

Ferozsons keeps getting strong

While its competitors fell by the wayside, Ferozsons was able to register phenomenal growth and sustainable profits. The company had felt that they needed to build strategic alliances and carry out contract manufacturing which allowed it to have stable revenues. Having alliances with Boots Pharma-

ceuticals, Grunenthal, Lakeside Laboratories and Procter and Gamble, Ferozsons was able to move into a new avenue available to itself.

The alliances meant that there was technology transfer from the developed brand to Ferozsons allowing for new therapeutic segments to be exploited which was not being considered in the past. Cheaper local manufacturing also opened up the opportunity to export the surplus being produced which benefited both Ferozsons and its international partner. Ferozsons was also able to provide an alternative or substitute therapeutics which was being imported earlier. This also cut down the cost of treatment in the country as well.

By being able to expand into different areas, Ferozsons was providing medicines for cardiology, gastroenterology, oncology and dermatology. The company was also able to establish itself as a mid to large manufacturer having a wide product range and distribution network in place to deliver the products to the market.

Being one of the first movers in the industry, Ferozsons also jumped on the opportunity to be able to enter high impact therapeutic areas which were being neglected before. Cooperating with global innovators, the company was able to develop pharmaceutical solutions

for fields of hepatology, biologics and oncology. Now the company is also moving into endocrinology, child health and diabetes as well.

One such joint venture has taken on a life of its own and is following in the footsteps of Ferozsons.

BF Biosciences

In 2006, BF Biosciences was created as a joint venture between Ferozsons Laboratories and Grupo Empresarial Bagó S.A. of Argentina. Based on the partnership structure, Ferozsons owns 80% while its Argentine counterpart has the remaining 20% of the shareholding. The purpose of this cooperation was to establish a world class biotech plant which would be used to manufacture biologic medicines in Pakistan.

Traditionally, Pakistan’s pharmaceutical industry is dominated by companies focusing on small molecule generics while advanced therapies are mostly imported. This creates a situation where large scale biologics are ignored. BF Bio was going to establish a biotech plant which would rely on large molecule biologic drugs, complex injectables and lyophilised treatments. In order to do so, technology and capital investment is required to carry out sterile large scale manufacturing. By entering such a market, BF

Bio would be able to replace imported medicines while meeting their clients needs.

In order to gauge the demand of the local market, BF Bio initially looked to import finished products from Argentina and then established their own local manufacturing facilities in 2009. Just like Ferozsons before it, BF Bio was going to enter a market of biologics, injectables and advanced therapies which were primarily imported. By stepping into this gap, BF Bio would be able to manufacture high quality products at a lower price.

While BF Bio had the backing of Ferozsons, it still needed expertise and experience in the field. It was able to do so by partnering with Bagó Group which had the technology, expertise and training to impart. BF Bio would be able to fill the gaps that existed in the local market for hepatitis, oncology, kidney disease and diabetes. In addition to that, they would also be able to export their products to other markets after conforming to the international standards and certifications. It is already exporting to Ukraine, Belarus and Indonesia after getting the PICS/S (Pharmaceutical Inspection Co-operation scheme) and SRAs (Stringent Regulatory Authorities) certifications.

The ground breaking success of BF Bio can be seen in the license agreement it signed with Gilead Sciences Inc (USA) which allowed

it to manufacture Remdesivir under Gilead’s Global Patient Solution (GPS) programme. This made BF Bio only one of the 5 companies which were able to secure this license in South Asia. The company also launched its own insulin under the brand name of Ferulin which provides affordable insulin in Pakistan. There has also been a launch of Sematide which is the first locally produced GLP1 in Pakistan. This is the localized version of semaglutide or Ozempic which is the rage all over the world.

From 2006 to 2024, BF Bio was an unlisted company. In 2024, Ferozsons chose to take the company public and instantly the market gave a strong response. The company was looking to carry out an Initial Public Offer of 25 million shares at a floor price of Rs 55. During the book building process, the strike price rose to Rs 77 which was the highest allowed price that the share could have seen causing an increase of 40%. The issue was also oversubscribed by 3.4 times which shows the level of interest in the issue. The value of funds raised came to around Rs 1.93 billion which were going to be used to fund machinery, gain additional certifications and plug any gap in the working capital requirements.

So what do the numbers tell us in relation to its financial performance?

Ferozson’s financial performance

The biggest contributor to the success of Ferozsons is reflected in the net sales of the company which stood at Rs 66 crores in 2005 and clocked in at Rs 13.9 billion in 2025. This shows a constant growth of 16.5% over a period of 20 years. The biggest advantage the company holds over the rest of the industry is that it is providing high impact therapeutics and able to maintain an advantage over its competition. Even when generics enter the market, Ferozsons is able to make sure that the product they provide is of high quality and preferred by patients over the lower quality version.

The impact of this can be seen on the gross profit margin earned which stood at 57% in 2005. Over the next 20 years, the margin saw a high of 58% and low of 34% leading to an average of 47% for the whole period. This shows how strong the margins were for Ferozsons in an industry where margins are mandated by price controls and costs out of control of the manufacturer.

Still something that is seen is that gone are the days when the company could consistently earn a gross margin in excess of 50%. Due to constant depreciation in the currency

and the entry of new competition, the gross margin now stands at 40% which was almost 60% in the best of times.

The strength of Ferozsons can be seen from the fact that its unappropriated profits have kept climbing year on year. Going as far back as 2005, the unappropriated profits stood at Rs 31 crores. In a span of 20 years, these profits have increased to Rs 5.9 billion. This is a compound annual growth rate of 16% per year. This figure is on the lower side still as revaluation of fixed assets would further add a value of Rs 3 billion which compliments the profitability at the company.

With administrative and selling expenses remaining relatively constant, the only area of concern was the finance cost which was 0.3% of sales in 2005 and has risen to 4.1% and 3.3% in 2024 and 2025 respectively. The interest rates that were seen in the economy reached an all time high of 22% in June of 2024. This led to the finance cost increasing to such an extent. This was compounded by the fact that the company was relying more on short term borrowings to meet its working capital requirements. In 2005, long term and short term borrowings stood at Rs 2 crores from which 50% was from short term debt. By 2025, short term borrowings had become almost 90% of the total debt taken.

Long term borrowings have the advantage of being cheaper in terms of the interest rate quoted. The downside is that these are not preferred in order to finance any working capital requirements that the company can have. As the revenues of Ferozsons started to increase, the company started to hold more stock in trade which has grown from Rs 10 crores in 2005 to Rs 5 billion in 2025. In addition to that, the trade debt has also increased from Rs 58 lakhs in 2005 to Rs 2.1 billion in 2025. With the short term borrowings, Ferozsons has also used its trade payables to fund some of these requirements as these have increased from Rs 6.6 crores to Rs 2.2 billion from 2005 to 2025.

This seems to be the only Achilles heel for Ferozsons where the cycle starts from borrowing in the short term, buying raw

materials, selling it to its debtors and borrowing more as recovery from customers is slower than expected. This keeps ballooning the short term borrowings further perpetuating the cycle further.

Financial performance of BF Biosciences

As the listing of BF Bio was quite recent, the financial data available for the company is much more limited compared to Ferozsons. Even for such a young company, it is surprising to see that BF Bio had unappropriated profits of Rs 59 crores on its books in 2018 which have now grown to Rs 2.6 billion by 2025.

The revenues for BF Bio show that the company earned Rs 52 crores in 2018 which rose to Rs 5.8 billion by 2025. In comparison, BF Bio earned nearly half of what its parent company managed in the same year. BF Bio has seen a mixed track record in terms of its profitability as it only saw a gross margin of 0.3% in 2018 which fell to -3.2% in 2019. This fall coincides with the fall that was seen at Ferozsons as well. Both companies seeing falling margins in 2018 and 2019 signal towards the fact that the depreciation of the rupee in 2018 led to increased costs for both companies.

The point of diversion happens after this between the two companies as Ferozsons sees falling gross margin while for BF Bio, the ratio rises to almost 45% in 2021 from -3% in 2019. While Ferozsons faced headwinds in terms of falling margins, BF Bioscience was able to see better profitability and margins which have now settled at around 40% in 2025.

Just like the parent company, the only thing holding back BF Bio to a certain extent is its finance cost which was only 0.15% of sales in 2018 but is now hovering at around 2% of sales. The figure reached a high of 8.5% in 2023, however, as sales increased in 2024 and 2025, this percentage has fallen to a certain extent.

In 2020, the total borrowings of BF Bio were Rs 65 lakhs from which a quarter were

made up of short term debts. By 2025, total borrowings had increased to Rs 1.7 billion which were weighing down the profitability.

The only saving grace for BF Bio was that while almost 90% of borrowing were short term in nature at Ferozsons, BF Bio relied much more heavily on long term loans as they made up 79% of its total debt. Another positive aspect was that most of these long term loans were Temporary Economic Refinance Facility (TERF) loans which had a very low rate of interest. These loans were given during Covid-19 to help the companies invest when economic activity was expected to be muted. By availing these loans, BF Bio was able to lock in a low rate for the long run which was going to keep its interest cost low.

The use of these additional funds can be seen in the stock in trade for BF Bio which was Rs 12 crores in 2018 and has increased to Rs 1.6 billion in 2025. The trade debts have also increased from Rs 5.7 crore to Rs 18 crores from 2018 to 2025 even though the magnitude is much lower. Lastly, the trade payables are used to fund much of the asset increases as they have increased from Rs 15 crores to Rs 1.1 billion from 2018 to 2025.

From the analysis carried out, it can be seen that Ferozsons has looked to not only survive but thrive in an industry where competition is high and the landscape is dynamic in terms of regulations, price controls, exchange rate and competition coming in. Ferozsons has reached on the magic formula to be able to compete in such an industry. Bring in technical know how and expertise with partnerships, develop itself in the local market and look to maintain quality. Even if generics begin to enter the market, keep moving and developing in order to maintain its dominance.

With BF Bio becoming listed, the same formula is being applied where margins are sustaining and profits are becoming a constant at both companies. As long as both these companies stick to this formula, it can be expected that they will keep chipping away in this dog eat dog sector. n

TPL Trakker revenue drops 43% in 2025

As government contract concludes, the company’s revenues have fallen back down to organic levels

TPL Trakker Ltd, the Karachi-based telematics and Internet-of-Things (IoT) company, reported a sharp fall in turnover for the financial year ended June 30, 2025, as the exceptional lift from a major government contract ebbed and the group’s UAE arm stopped being consolidated.

On a consolidated basis, TPL Trakker posted turnover of Rs1.83 billion in FY2025, down from Rs3.21 billion a year earlier – a decline of about 43%. Cost of sales and services reduced alongside, yielding a gross profit of Rs703 million versus Rs1.41 billion in FY2024. The statement of profit or loss shows operating profit of Rs185 million, with finance costs of Rs343 million, and other income of Rs480 million. After taxes and discontinued operations, total comprehensive loss narrowed dramatically to Rs7.7 million, with profit attributable to owners of the holding company of Rs13.7 million and EPS of Rs0.07, compared with Rs0.03 last year.

Management had telegraphed the coming reset in its March-quarter directors’ report, noting that nine-month consolidated revenue had already fallen as a major Customs contract drew to a close and the Middle East arm moved out of line-by-line consolidation. The company wrote: “This decrease is primarily due to the conclusion of the Safe Transport Environment (STE) project with Pakistan Customs / Federal Board of Revenue (FBR),

which ended December 31, 2024, as well as the elimination of Trakker Middle East’s revenue from the consolidation following the change in its classification from a subsidiary to an associated company.”

That shift matters for optics as well as operations. The STE programme, awarded in 2022 for a three-year term, had broadened TPL Trakker’s licensed scope from Afghan Transit alone to all bonded cargo movements – a change that materially expanded the serviceable market while it lasted. With its expiry at end-December 2024, the company’s FY2025 second-half run-rate reverted to what management calls “organic” commercial activity in core telematics, fleet and location-based services (LBS).

The reported numbers therefore juxtapose a high STE-inflated base in FY2024 against a normalised FY2025, and they exclude Trakker Middle East’s (TME) top line after that business was reclassified as an associate during FY2025 following a fresh equity injection by Dubai-based Gargash Group. Management says the partnership is intended to drive deeper market penetration across the Gulf, but the accounting change naturally pulled TME’s revenue out of TPL Trakker’s consolidated top line.

For investors, the immediate readthrough is that FY2025 marks a trough year in reported revenue rather than a collapse in the company’s addressable demand. The consolidated statement shows the company still pro-

ducing operating profit and positive earnings attributable to the holding company, helped by other income and tighter cost control through the year.

To understand the scale of last year’s base effect, one needs to understand the STE programme itself. The Safe Transport Environment (STE) project is an FBR-led initiative for real-time tracking and monitoring of bonded and transit cargo, conceived to reduce pilferage, curb smuggling, and ensure that duty-suspended consignments move only along authorised routes and reach declared destinations on time. The concept dates back more than a decade: discussions in Customs circles began after repeated audit observations on cargo losses, and an FBR conference in 2007 decided to initiate the technology-enabled tracking regime. A formal expression of interest followed in 2011.

In June 2022 the FBR granted TPL Trakker a three-year licence for the STE project. Crucially, the scope was enhanced from Afghan Transit to the entire spectrum of bonded cargo transportation, including inter-port movement, dry-port transhipments, and both forward and retro cargo on Afghan routes. That single regulatory expansion materially lifted TPL Trakker’s potential volumes under STE.

The mechanics are straightforward: containers and bonded carriers are fitted with tracking devices and e-seals, movements are monitored in near real-time in an FBR control room, and exceptions trigger field interven-

tions. Over time, Customs has complemented these measures with scanning at entry and destination points and has discussed competitive re-tendering to keep vendors current on GSM and satellite technologies. Those moving pieces are why STE volumes – and, therefore, tracking revenues – can be sensitive to policy changes and re-licensing cycles.

During FY2024, STE revenue was further buoyed as the government stepped up enforcement and expanded the practical footprint of tracked flows. Earlier company briefings highlighted that transhipment cargo was made operational under the licence, while rate adjustments were allowed for certain categories to reflect added e-seal security – both of which supported topline. All of that makes the December 2024 end-date pivotal for understanding FY2025’s reported decline.

A separate thread to watch is that Pakistan’s broader tax-technology agenda is still advancing. The World Bank in mid-2025 approved additional financing for the Pakistan Raises Revenue programme supporting FBR’s ICT upgrade, even as some deliverables like track-and-trace targets have lagged. Any successor cargo-tracking framework that emerges from this policy churn could again shape the revenue cadence for private tracking providers.

TPL Trakker’s story predates the current IoT buzzwords. The company traces its roots to 1999, when it became the first firm in Pakistan to secure a vehicle-tracking licence. It listed on the Pakistan Stock Exchange in 2012 (then as TPL Trakker Limited, before a group-level reorganisation created TPL Corp as the investment holding company). Over two decades, the business has grown from vehicle recovery to a broad suite of telematics, mapping and location-data services for consumers, corporates and public-sector clients.

Within Pakistan, TPL Trakker positions itself as a leading telematics and IoT provider, leveraging an in-house mapping stack built under the TPL Maps brand – a platform licensed by the Survey of Pakistan that offers APIs for navigation, geocoding, routing and analytics. That location-data capability underpins many of the company’s enterprise solutions and differentiates it from pure hardware vendors.

Internationally, the group established Trakker Middle East (TME) as early as 2006, a presence that was reshaped in FY2025 via the investment by Gargash Group and the resulting reclassification to an associate. Management says the regional alliance is aimed at pooling TME’s sector know-how with Gargash’s reach and financial capacity to pursue GCC opportunities – again a strategic logic that lives outside the FY2025 top-line, given the equity-accounting treatment.

While the STE contract amplified revenues in the last cycle, commercial telematics and mapping remain TPL Trakker’s core fran-

chise. On the B2C side, the company markets vehicle, bike and personal tracking solutions with theft-recovery assistance and app-based features. On the B2B side, it offers fleet management (vehicle health, driver scoring, route optimisation, geofencing and analytics), fuel monitoring for vehicles and generators, and AI-enabled video telematics for driver safety and incident forensics.

The company has also pushed into industry-specific IoT verticals:

• Cold-chain monitoring (temperature-controlled logistics for food and pharma),

• Smart farm systems (soil moisture, irrigation and asset tracking),

• Water-level monitoring (for utilities and municipalities), and

• Waste-management and municipal fleet solutions (including recent deployments with public-sector entities).

Under the TPL Maps/LBS umbrella, the company provides location-based services via APIs – routing, distance matrices, place search and more – used by ride-hailing, logistics and e-commerce players. Partnerships in recent years have integrated TPL Maps into third-party apps to improve localisation accuracy, a key selling point against generic global datasets.

Management commentary around the March quarter emphasised three growth levers for the post-STE era:

1. Core telematics – expanding corporate fleets with bespoke dashboards and analytics;

2. Industrial IoT – scaling solutions that deliver measurable fuel, safety and productivity gains; and

3. Digital mapping/LBS – monetising APIs and data services across finance, logistics and consumer apps. The directors’ report also noted a QoQ uptick in telematics volumes in Q3 FY2025 within the B2C segment, alongside active business development in LBS.

TPL Trakker is part of TPL Corp, a holding company whose portfolio spans general and life insurance, real estate development and REIT management, security services, asset tracking, geospatial technology and venture capital. TPL Corp itself evolved from the original tracking business and was rebranded as the group’s investment arm in 2017; it remains the parent of TPL Trakker and other operating companies. Credit-rating agency profiles and corporate materials describe the group’s strategic intent as building technology-enabled platforms around mobility, risk and property – with Trakker providing the data and infrastructure layer for many cross-company offerings.

That group architecture has two practical implications for Trakker’s outlook. First, distribution synergies: insurance, security and property businesses provide captive channels for telematics and LBS, and vice-versa. Second,

capital allocation: the holding structure allows TPL Corp to deploy growth capital across its portfolio as market windows open – as seen with the TME partnership – without necessarily consolidating all revenue at Trakker in perpetuity.

Set against those strategic contours, FY2025’s financials look less like retreat and more like normalisation after an extraordinary contract cycle. The company’s Rs1.83 billion top line now represents primarily commercial telematics and mapping revenues in Pakistan, plus equity-accounted contributions from the UAE. The income statement shows that, even with a smaller revenue base, the business generated operating profit, while finance costs (a sector-wide headwind in Pakistan’s highrate environment) continued to weigh on the bottom line. Nevertheless, EPS improved to Rs0.07, reflecting lower losses from continuing operations and a swing in other comprehensive income.

Investors will naturally ask what replaces STE’s volume and whether a successor Customs tracking regime could re-open that spigot. On the policy side, FBR has been signalling upgrades to cargo-tracking rules and fresh competitive tendering, while pursuing parallel digitisation efforts (such as the trackand-trace programme for excisable goods). Any new framework could see TPL Trakker compete again, but timelines and commercial contours remain policy-dependent.

In the interim, the operational plan is to lean into core telematics growth – expanding the enterprise fleet base and upselling analytics – and to monetise LBS more deeply via APIs and industry partnerships. The company argues this mix is structurally healthier: diversified across customer verticals, less exposed to policy swings, and rooted in proprietary location data rather than commoditised hardware. Management’s March note underlined precisely that pivot, highlighting progress in onboarding enterprise clients in FMCG and banking, and a stronger B2C trajectory after a soft patch in the automotive sector.

TPL Trakker’s FY2025 is a reset year. The 43% fall in revenue is real, but it is also mechanical, reflecting the expiry of a timebound government licence and an accounting reclassification of the UAE arm. Underneath, a leaner, more diversified commercial engine is visible: profitable operations before financing, a larger suite of industry IoT offerings, and a proprietary maps platform that gives the company a differentiated role in Pakistan’s digital infrastructure. If policy winds deliver a new cargo-tracking regime, that would be upside; if not, the company’s challenge is to scale the B2B telematics and LBS engines fast enough to outgrow a heavy FY2024 base – and keep finance costs in check while doing so. n

Thatta Cement wants to assemble Belarusian tractors in Balochistan

The cement manufacturer has announced the creation of a subsidiary that will assemble tractors in collaboration with Minsk Tractor Works

Thatta Cement Company Ltd has unveiled plans to diversify far beyond clinker and bagged cement: its newly created, wholly owned subsidiary, Minsk Work Tractor & Assembling (Pvt) Ltd (MWTA), has signed an exclusive agreement with Minsk Tractor Works of Belarus to assemble and locally produce BELARUS-brand tractors in Balochistan. The company disclosed the development to the Pakistan Stock Exchange (PSX), stating that MWTA has been granted the exclusive right to assemble BELARUS tractors in Balochistan and that the project aims to promote industrial development, job creation and technology transfer by establishing a local assembly facility in the province.

Corporate diversification is hardly unusual in Pakistan, but a cement producer venturing into tractor assembly raised eyebrows for the scale of the leap and for its geopolitical overtones. Thatta Cement’s notice frames the deal as a long-term strategic step to “diversify the Thatta Cement Group’s business portfolio.” It also positions the planned assembly line as a development catalyst for Balochistan, where industrial ventures outside mining have historically been sparse. Under the agreement, Thatta’s MWTA subsidiary will work with Minsk Tractor Works (MTZ) to assemble the BELARUS range locally, with the Belarussian

manufacturer conferring exclusivity in the province.

The initiative lands at a time when Pakistan’s farm mechanisation cycle has been whipsawed by weather, credit and policy shifts, yet demand for tractors remains structurally tied to the country’s agricultural base. Provincial subsidy programmes – notably the Punjab Green Tractor Scheme – have periodically spurred volumes, most recently by offering large per-tractor subsidies for 50–85 horsepower units, a bracket that captures mainstream farm demand.

From Thatta’s standpoint, the logic is twofold. First, to tap an end market decoupled from Pakistan’s volatile construction cycle; second, to enter an arena where a global brand partner can provide product, parts and know-how. For investors, however, the surprise is real: Thatta is not currently known for heavy-equipment assembly, and the tractor segment is dominated by two entrenched players – Millat Tractors (licensee of Massey Ferguson) and Al-Ghazi Tractors (licensee of New Holland) – that enjoy deep vendor bases, installed fleets and service networks. Even so, demand spikes in 2024–25 amid subsidy deliveries showed that volumes are responsive to policy support, suggesting headroom for a third player if it can carve out a niche on price, ruggedness or regional reach.

Thatta Cement was incorporated in 1980 as a public limited company and began operating its plant in 1982 on dry-process technology. For years it was part of the state-owned cement network, a wholly owned subsidiary of the State Cement Corporation of Pakistan, until the federal government privatised the company in February 2004. The company later obtained a stock-market listing and remains focused on the production and marketing of cement products.

The company’s manufacturing facility is located on Ghulamullah Road, Makli, District Thatta, Sindh, and sits on a sizeable land bank for quarrying and plant operations. Over time, Thatta has made process improvements to lift output at the Makli plant and has reported capacity enhancements, including in-house modifications undertaken in 2021 to raise clinker and cement capacities. The product slate covers Ordinary Portland Cement (OPC), Sulphate Resistant Cement (SRC) and slagbased blends for specialised applications such as marine works and piling.

Ownership of Thatta has evolved since privatisation, with well-known market participants at various points associated with the shareholding. But the company’s public disclosures and sector coverage consistently define it as a Sindh-based mid-tier producer with a regional sales footprint and a reputation

for SRC in saline and coastal environments. It is against this backdrop – a focused, regionally anchored cement manufacturer – that the tractor announcement looks unexpected, and therefore strategically bold.

Founded on 29 May 1946 in Minsk, Minsk Tractor Works (MTZ) is among the world’s largest manufacturers of agricultural equipment. Over its history, MTZ and its BELARUS brand have produced more than 3 million tractors, exporting to over 100 countries, and today offer a wide catalogue of models and configurations adapted to diverse climates and operating conditions. In recent years MTZ has continued to update its product range, including higher-horsepower models, while pursuing export markets through distributors and assembly partners.

The BELARUS marque is well-known across the former Soviet space and in developing markets for rugged design, relatively simple mechanics and affordability – attributes that appeal to farmers looking for robust machines that are easier to maintain outside sophisticated dealership networks. MTZ’s global sales channels have included North America, where distribution for compliant models was re-established through a dedicated distributor, as well as Asia, Africa and Latin America. For Pakistan, MTZ has a long if episodic brand presence: BELARUS tractors have been imported in the past, competing primarily on price-per-horsepower against entrenched local brands.

Pakistan’s tractor industry is dominated by two incumbents: Millat Tractors (Massey Ferguson) and Al-Ghazi Tractors (New Holland). Their combined share typically accounts for the vast majority of domestic sales, supported by deeply localised vendors, long-running assembly operations and extensive service networks. Al-Ghazi, for instance, positions itself as the second-largest player with a market share in the mid-30s, while Millat is usually the segment leader. Both are listed companies with visible financials and frequent disclosures.

Demand is cyclical but policy-sensitive. Province-level subsidy programmes can swing monthly volumes sharply. In December 2024, as the Punjab Green Tractor Scheme deliveries took place, industry sales reportedly surged to around 7,030 units for the month, with Millat selling 4,686 units – its highest monthly tally in nearly seven years. Government portals and departmental notices outline generous per-tractor subsidies aimed at accelerating mechanisation, with eligibility bands set by farm size and power rating, and programme portals now publishing balloting updates for successive phases. These interventions underscore how tractor sales can spike when subsidies are available and credit is accessible. Even outside subsidy waves, secular

drivers exist. Mechanised land preparation and post-harvest operations, the need to cover larger acreages amid labour constraints, and aspirations to improve yields all underpin a structural case for tractors. Conversely, taxes, interest rates and supply chain disruptions can depress volumes. News reports through 2024 showed both sharp year-on-year falls in select months and strong rebounds when policy tailwinds returned, illustrating how volatile headline numbers can mask an underlying installed-base replacement cycle.

Where does Thatta fit? As a potential third assembler with a Belarussian partner, Thatta may try to compete on a mix of price, durability and regional presence. BELARUS tractors have a reputation for ruggedness and low-frills serviceability – traits that could resonate with buyers seeking value or operating in harsher terrain. Locating assembly in Balochistan may also open logistical advantages for serving customers across the province and neighbouring regions, while the exclusivity granted to MWTA in Balochistan protects local investment in networks and spares. The harder task will be building a vendor base, financing channels, after-sales support and resale confidence to chip away at incumbents’ dominance. The PSX notice suggests Thatta and MTZ see technology transfer as integral to the project, a necessary foundation for scale.

The partnership inevitably carries geopolitical baggage. Belarus is a close ally of Russia and allowed Russian forces to stage parts of the February 2022 invasion of Ukraine from its territory. Western responses have included rounds of sanctions targeting Belarussian entities and sectors, with periodic updates and guidance – not least the European Union’s clarification of “best efforts” obligations on EU operators to prevent sanctions circumvention via overseas subsidiaries. Although some specific measures have been tweaked over time, the sanctions environment remains a moving target, and reputational considerations linger wherever Belarus-linked projects are concerned.

For Pakistan, the sensitivities are heightened by long-standing defence ties with Ukraine. Islamabad acquired 320 T-80UD tanks from Ukraine between 1997 and 2002, and Pakistan’s Al-Khalid main battle tank uses Ukrainian KMDB 6TD-2 engines. Ukrainian state defence firms have, at various points, secured support and maintenance contracts for Pakistan’s armoured fleet. These linkages have persisted through a turbulent geopolitical period and remain a substantive strand in Pakistan–Ukraine relations.

Bringing a Belarussian OEM into Pakistan’s civilian industrial landscape does not, in itself, breach any rule; automotive machinery is distinct from armaments, and Thatta’s PSX

notice concerns agricultural tractors. But the optics are complex: Belarus’ alignment with Russia in the Ukraine war and its sanction exposure could raise due-diligence expectations among banks, insurers and international suppliers. It could also invite scrutiny from counterparties with EU or UK touchpoints, who must evidence “best efforts” to ensure they do not facilitate sanction circumvention – particularly relevant if any components, software or financing streams intersect with jurisdictions observing Russia/Belarus measures.

At the same time, Belarus has signalled intermittent openings to the West, and global reporting in 2025 has chronicled limited sanction adjustments alongside prisoner releases and diplomatic overtures, even as most core restrictions and political concerns remain in place. None of this resolves the underlying tension: Belarus is still widely seen as a co-belligerent in the conflict’s early phases, and its leadership openly defends its support to Moscow. For a Pakistani project, the practical takeaway is not to avoid engagement per se, but to design compliance into the venture –from supplier vetting and banking channels to export control checks if any kits or components touch sensitive lists.

Pakistan has seen sector-hopping before – from energy groups moving into auto assembly to textile firms investing in power – usually justified by currency hedges, import substitution, or a search for steadier cash flows. Thatta’s planned tractor venture sits in that tradition of portfolio diversification, but it is also a test of execution in a market with formidable incumbents.

Critically, the partnership structure matters. MTZ brings brand equity, a wide product catalogue and export experience; Thatta brings a public-company platform, local governance, and a stated commitment to technology transfer in Balochistan. If the parties can establish reliable localisation, affordable financing and credible after-sales, the BELARUS badge could find a durable niche, especially in districts where ruggedness trumps frills and where price-per-horsepower can pry buyers from entrenched loyalties. Conversely, if compliance frictions or supply bottlenecks slow kit flows, the venture may face a longer, costlier journey to relevance.

For now, the market will focus on milestones: site selection and regulatory clearances in Balochistan; the assembly model and initial localisation plan; dealer and service appointments; homologation and testing timelines; and any early orders tied to provincial schemes. The PSX notice sets the tone – exclusivity in Balochistan and a development pitch centred on jobs and technology transfer – but leaves room for detail that investors will want to see in the quarters ahead. n

Slowly, PSO’s cash flow position is improving

The company has been able to pay down its dollar-denominated debt, and expects a decline in receivables following government efforts to resolve circular debt

Pakistan State Oil (PSO), the country’s largest oil marketing company, is crawling out of the liquidity squeeze that has dogged it for years. Management briefings around the company’s annual general meeting point to tangible improvements: foreign-currency borrowings are being pared down, policy changes are reducing the build-up of receivables tied to gas allocations, and a long-awaited government plan to cut the energy sector’s circular debt is finally on the table. While none of these shifts is a silver bullet, together they mark the first sustained easing in the company’s cash flow pressures in years.

The clearest headline is debt. PSO’s foreign loans have fallen from about $1.3 billion to $900 million, with management aiming to trim a further $300 million by year-end. For a balance sheet exposed to dollar swings and import-linked working capital, cutting hard-currency leverage is the fastest way to steady cash flows and reduce finance costs. It is also a confidence signal to banks and suppliers that PSO can fund cargoes without leaning as heavily on expensive external lines.

A second relief valve is the sharp fall in receivables linked to the diversion of imported re-gasified liquefied natural gas (RLNG) to domestic users. In earlier years, this diversion piled up unpaid bills at PSO because the end customers were not on cost-reflective tariffs, and the arrears often sat with the gas utilities. Management now reports that the value of these diversions has declined from roughly Rs200 billion to around Rs80 billion, as the government has nudged prices and tariffs closer to economic levels and strengthened recoveries at the Sui companies. Fewer subsidised diversions mean fewer IOUs parked on PSO’s books – a direct

cash flow win.

Third, there is the circular debt reduction plan. Islamabad has signed off on a Rs1.2–1.3 trillion package aimed at unwinding payables and receivables across the power and gas chains. The specifics of how much lands in PSO’s account, and when, are still being worked through. But even an incremental release of cash would shorten PSO’s cash conversion cycle and reduce the need for costly short-term borrowing to bridge timing gaps between fuel imports and customer payments.

PSO is also making operational moves to support liquidity. It is optimising the use of pipelines to cut logistics costs, expanding its retail footprint in regions where its share has slipped, and seeking approval to set up a trading subsidiary to enhance procurement flexibility. Lower unit costs, more predictable product flows, and a broader retail base all help the company defend volumes and margins without resorting to aggressive discounting that would sap cash.

Finally, there are income line items that matter for working capital. Management underscored that line-fill income – the return PSO earns on the inventory volumes required to operate pipelines – is a recurring feature tied to interest rates and working capital deployment, not a one-off windfall. Properly managed, those inflows can cushion quarter-to-quarter swings in cash outlays for product.

Put together – lower dollar debt, smaller RLNG receivables, a pending government paydown, and operational tweaks – PSO’s liquidity picture looks measurably better than a year ago. The path is not linear, and tax and margin questions still hover, but the direction is finally favourable.

To understand why the company’s cash

has been so tight, it helps to revisit circular debt – the knot of unpaid bills that forms when energy tariffs do not fully cover costs, technical and commercial losses are high, and subsidies are delayed or under-funded. In power, this manifests as distribution companies falling behind on payments to generators, who then struggle to pay fuel suppliers. In gas, non-cost-reflective prices for domestic users and leakages at utilities translate into sizeable receivables. PSO sits at the front end of the chain, importing fuels and LNG that the rest of the system consumes – and then waiting to be paid.

Two features have been particularly damaging for PSO’s cash cycle:

• RLNG diversion to households. When imported LNG earmarked for industry or power is diverted to domestic consumers at controlled prices, there is often a gap between the cash PSO must pay suppliers and the receipts that the gas companies collect from users. That receivable lands on PSO’s balance sheet and can linger. The recent shrinkage of these diversions, thanks to tariff moves and new connections that improve utility recoveries, directly reduces this drag.

• Delays and disputes in systemic settlements. Even when the federal government decides to inject cash to reduce circular debt, timing and allocation can be uncertain. PSO’s management notes the circular debt reduction plan is approved, but the share and schedule of funds earmarked for PSO remain unclear. That uncertainty forces the company to maintain higher working capital buffers than it otherwise would.

While these are structural issues, the current policy mix – tariff rationalisation, a serious reduction plan, and closer attention to recoveries – suggests PSO’s receivables should trend down, or at least rise at a slower pace than in the past. The company’s own pace of deleveraging will

then amplify the improvement in net cash flows.

Founded in the mid-1970s through the consolidation of several marketers, PSO evolved into Pakistan’s dominant downstream player, with the largest storage footprint, the broadest retail network, and the lead role in importing critical fuels – including Mogas, High Speed Diesel and furnace oil – whenever local refinery output falls short. Decades of investment in depots, pipelines, and coastal terminals have made PSO the system integrator of Pakistan’s liquid-fuels market.

That centrality cuts both ways. In good times, scale brings bargaining power with suppliers, lower per-unit logistics costs, and the ability to ensure national supply even when global markets are tight. In stress scenarios, the obligation to keep product flowing – often on terms dictated by policy, not pure commercial logic – heaps the financing burden on PSO’s balance sheet. The company’s market share reflects these cross-currents: management disclosed that PSO’s white-oil share (primarily petrol and diesel) fell to 45% in FY25 from 51–52% the year before as rivals courted dealers with discounts. Regaining share without destroying margins is the tightrope PSO must walk.

Another structural feature is taxation. Management pegs the effective corporate tax rate near 42%, a blend of base corporate tax, super tax, and a flat tax on LNG. High effective taxation reduces retained earnings and narrows the room to self-fund capex or working capital, making deleveraging even more important for financial flexibility.

While PSO is not itself a refinery operator, the quality and quantity of local output directly affect its import bill, exposure to international premiums, and working capital needs. Management points to Pakistan’s Greenfield and Brownfield refinery policies, under which upgrading existing plants and adding new capacity could save between $1.6–2.0 billion a year in foreign exchange currently paid as premiums to international traders. Those premiums reflect the cost of sourcing compliant fuels from abroad, including product-quality differentials and the convenience premium that traders charge to place cargoes in a market with tight storage windows and lumpy demand.

Refinery upgrades matter for three reasons:

• Product mix and quality. Upgrading to deeper conversion and better desulphurisation lifts the yield of Euro-grade petrol and diesel and cuts high-sulphur residual output. More compliant barrels produced domestically reduce the need to import high-spec product. That translates to fewer letters of credit outstanding at any point in time, and less exposure to volatile spot premiums – a cash flow smoother for PSO.

• Scheduling and logistics. When domestic refineries can match more of the market’s seasonal

demand, PSO can plan imports more evenly, lowering demurrage risks and pipeline bottlenecks. Better synchronisation reduces the costly “peaks and troughs” of inventory financing. • FX and credit. Fewer imports directly reduce foreign-currency drawdowns and the reliance on external trade finance, a relief when dollars are dear. For PSO, which has worked hard to cut foreign-currency debt, any structural reduction in FX needs helps consolidate that progress.

The policy test is execution: upgrades take time, and the incentive framework must be credible enough for refineries to finance projects at scale. But the strategic direction – more domestic compliance barrels, fewer imported cargos on tight timelines – is unambiguously positive for PSO’s cash conversion.

PSO competes in a market where dealer and company margins are regulated, but where pricing tactics can still swing share. Over the past year, a price war has featured discounts of up to Rs8 per litre offered by some oil marketing companies to dealers or large customers. The government has taken note, and a long-pending revision of OMC margins – which industry argues is overdue to reflect costs – has been sent back for reassessment precisely because widespread discounting muddies the picture of what a “sufficient” margin really is. If marketers can give away Rs8 per litre, policymakers ask, are margins in fact too high already?

For PSO, there are three implications: • Market share vs cash discipline. Chasing every litre via discounts is tempting when share has slipped – management acknowledges the fall to 45% in white oils – but it burns cash and cheapens the brand. PSO’s stated response is more targeted: expand retail in under-penetrated regions, squeeze logistics by maximising pipeline utilisation, and bring more trading flexibility into procurement once approvals for a subsidiary are in hand. That is a slower but healthier route back to share.

• Working capital strain. Discounting can lengthen receivable cycles and compress cash inflows just as import payments fall due. In a high-rate environment, that is doubly painful. By leaning on operational efficiencies rather than blanket discounts, PSO can protect cash without abandoning the field.

• Margin reset risk. If the official OMC margin is adjusted without a clean view of cost realities, the industry could face a margin that is too low to cover legitimate expenses, entrenching discount wars as companies try to compensate via volume. PSO’s sheer scale gives it some resilience, but sustained under-recovery would still bleed cash.

The company must also manage policy frictions that can add costs or uncertainty to imports. One example is the Sindh Infrastructure Development Cess (SIDC) on petroleum imports. Bank guarantees were mandated in

September 2021, but the war-related shock to trade finance complicated compliance. In RLNG, the cess has been passed through to consumers; for liquid fuels, the federal and provincial authorities are still shaping a practical regime. Management expects the cess will continue to be passed on, but clarity matters for pricing and working-capital planning.

Even as cash generation improves, the tax take is heavy. With an effective corporate tax rate around 42%, PSO faces a meaningful drag on after-tax cash flows. LNG, a core part of its portfolio, also carries a flat tax, reducing the net cash available to accelerate deleveraging or to invest in network upgrades. The company can mitigate this with cost cuts and better inventory turns, but the tax burden is a structural headwind that only policy can ease.

Three markers will decide whether PSO’s liquidity keeps improving:

1. Delivery on debt reduction. The plan to bring foreign debt down by a further $300 million is concrete and measurable. Hitting it would meaningfully reduce FX and interest exposure.

2. Receivables trajectory. The RLNG receivable improvement is already visible; the circular debt release is the swing factor. Even partial, predictable inflows will shorten PSO’s cash conversion cycle.

3. Retail sanity. If the price war abates and the margin policy is settled on cost-reflective grounds, PSO can focus on network depth, service quality and logistics – areas where it holds natural advantages – rather than on giveaways that corrode cash.

None of this downplays the challenges. Global oil prices are volatile, exchange control constraints can return, and local demand can soften if economic growth stalls. But the trend lines inside PSO’s control – debt, receivables tied to policy distortions, and operating efficiency – are finally pointing the right way. If refinery upgrades proceed under credible incentives, even the imported-premium penalty that has long haunted PSO’s working capital could begin to shrink.

PSO’s cash flow story has been a long grind of import now, get paid later. In the past year, the pieces have started to shift: a lighter dollar debt load, smaller RLNG-related receivables, a signed national plan to chip away at circular debt, and a deliberate pivot to operational efficiency rather than blanket discounting. Taxes remain high and retail competition is still fierce under regulated margins, but the company’s position is materially better than it was. What investors will look for now is follow-through: fewer dollars owed, fewer rupees stuck, and a retail playbook that wins share without torching cash. If that happens, “slowly improving” could turn into a sturdier, more durable cash flow recovery.

After slowdown in 2025, Airlink gearing up for major expansion in 2026

The electronics assembly company will begin production on its Acer laptop facility, expand is domestic cellphone assembly, and begin shipping television sets as well

Air Link Communication Ltd (Airlink) is preparing for a year of expansion after a softer patch in 2025. Management briefings with analysts indicate the company plans to step up output in mobile phones, switch on its new laptop assembly line for Acer-branded devices, and begin commercial shipments of television sets, even as it courts global partners for a broader push into white goods. The pivot comes as Pakistan’s import regime normalises and as taxes and finance costs start to ease from last year’s peak – conditions that had pinched the top line in 2025 but have begun to turn in the company’s favour in early 2026.

Airlink’s financial year to June 30, 2025, showed a visible slowdown in revenue versus 2024. Consolidated net sales fell to about Rs104.0 billion in FY2025, down 20% from Rs129.7 billion in FY2024, according to analyst briefing tables shared after the October corporate call. Yet profit after tax still edged up to Rs4.7 billion, with EPS at Rs12.0 versus Rs11.7 the year before, helped by a stronger gross margin and operating leverage.

The softer FY2025 revenue print contrasts with a sharp year-on-year rebound in the first quarter of FY2026. For 1QFY2026, Airlink reported sales of Rs24.4 billion, up 11% YoY, and profit after tax of Rs1.58 billion (EPS Rs4.01), which is 88% higher than the same quarter last year. Management added that sales were held back by the September floods; absent that disruption, they estimate the quarter could have reached about Rs30.0 billion in

revenue. They now expect Rs30.0–35.0 billion of sales per quarter for the remaining quarters of FY2026, implying a much brisker run rate than the FY2025 average.

The profit cadence also reflects an improving gross margin profile. The briefing pack shows margin expansion in FY2025 to about 11% versus 7% in FY2024; in 1QFY2026, gross margin further improved to around 14%, supported by a better product mix and negotiations with principals that lowered costs. Operating profit rose accordingly, with 1QFY2026 operating profit of Rs3.0 billion, up 69% YoY, even as finance costs remained elevated.

Management acknowledged that finance costs are still sizeable despite the policy-rate downtrend, because working capital expanded to feed growth. They described the higher borrowing as a “sponsored cost” that is largely passed through in pricing, a stance made easier by a product mix skewing to higher-value devices.

The principal drag on FY2025 revenue was policy-driven, not structural demand. Throughout the year, Pakistan’s electronics industry wrestled with import controls, intermittent LC restrictions, and higher taxes and duties, which constrained the availability of key components and delayed product launches. In that environment, volumes suffered and channel inventories were kept lean, limiting top-line throughput even as the company preserved profitability via tighter costs and an improving mix.

Airlink’s management told analysts that a relaxation in these constraints is already

feeding through to sales. The company’s Sundar Industrial Estate project – a designated 10-year tax-free zone – should further blunt the tax headwinds as production shifts to that site. The plan is to keep mobile phone assembly active at both the existing Quaid-e-Azam Industrial Estate and the new Sundar facility, while placing all new lines (LED televisions and selected white goods) at Sundar to capture exemptions and streamline logistics.

A few short-term factors also clipped FY2025 revenue and 1QFY2026 momentum. The company pointed to September’s floods, which dented retail traffic and deliveries in parts of the country, and to a one-month supply disruption linked to overseas events that briefly tightened the pipeline. Those transient effects are expected to fade as the year progresses.

Airlink’s trajectory mirrors the broader maturation of Pakistan’s device industry over the past decade. The company first established itself as a nationwide distributor and retailer, building relationships with leading global mobile brands and rolling out multi-brand as well as brand-dedicated storefronts. Over time, and in step with local-manufacturing incentives, Airlink back-integrated into assembly, becoming one of the most prominent domestic assemblers of smartphone handsets.

Today, Airlink combines assembly, distribution, and retail across key consumer-electronics categories, and it is one of the few listed players with that end-to-end footprint. The retail arm itself has been scaling, with retail revenue rising from roughly Rs1.1 billion in

FY2024 to around Rs2.0 billion in FY2025, and a fresh slate of flagship locations rolling out. The company recently opened a Samsung store at Dolmen Mall and plans to open a Xiaomi store in November and Pakistan’s first iPhone monostore in December, a triad that underscores the breadth of its brand partnerships on the high-street.

The corporate strategy is to keep a strong distribution and retail spine while scaling local assembly to reduce currency exposure, shorten lead times, and improve margins. Listing on the Pakistan Stock Exchange gave Airlink capital and visibility to pursue that plan; management has since executed a series of facility upgrades and product-line additions to anchor the move beyond phones.

Airlink enters FY2026 with three growth engines: phones, laptops, and televisions –plus optionality in white goods and electric vehicles.

Phones. Management targets overall production growth of around 20% in FY2026, with 2.5–2.6 million mobile units to be manufactured during the year. The ramp reflects both Tecno and Xiaomi output increases and a normalising supply chain. The company expects these two brands alone to add Rs10.0–15.0 billion in incremental revenue this year versus FY2025.

Laptops. The Acer line is the headline addition. Airlink has opened its first LC for laptops, with an initial 10,000-unit shipment to seed the market, and it aims to sell over 100,000 laptops by end-FY2026. Management pegs Pakistan’s addressable laptop market at more than 1.5 million units a year – a scale that, if captured even partially, would diversify the company’s revenue base beyond handsets. Laptops are expected to contribute Rs2.0–4.0 billion of revenue in FY2026 as the line ramps. Televisions. The company is bringing LED TV assembly online at the Sundar site, guiding to roughly Rs8.0 billion of TV revenue in FY2026. TVs fit naturally with the new facility layout (an entire ground floor dedicated to household appliances) and with Airlink’s existing retail and distribution muscles.

White goods. Airlink is in NDA-bound negotiations with top 4–5 global brands to introduce household appliances made locally. Agreements are expected to be finalised by 1QCY2026 (which corresponds to 3QFY2026), setting the stage for a new category launch. The company intends to distribute white goods through its existing dealer network, leveraging brand-store traffic as showrooms. EVs and e-bikes. Management is also testing electric vehicles in a measured way, planning to import a limited 500–1,000 units to gauge demand before committing to a joint venture if economics permit. In two-wheelers, e-bikes are on the roadmap; scooters are

not a near-term priority given infrastructure constraints.

The operational hub is shifting to the Sundar Industrial Estate, a 10-year tax-free zone that confers corporate and super-tax exemptions and promises process efficiencies. Mobile phone production will continue at both Quaid-e-Azam Industrial Estate and Sundar, while all new production lines – TVs and selected white goods, and ultimately larger appliances – will be built out at Sundar. Management expects to finance the new factory largely through internal resources, tapping banks only if needed, a choice that should keep leverage in check as volumes rise.

Putting the pieces together, Airlink is targeting roughly Rs140.0 billion in FY2026 revenue, compared to around Rs104.0 billion last year. The building blocks are TVs (~Rs8.0 billion), laptops (Rs2.0–4.0 billion), and higher mobile throughput (~Rs10.0–15.0 billion extra), with the remainder coming from the base handset business and retail. Quarterly sales of Rs30.0–35.0 billion across the remaining quarters would put that target within reach, assuming supply chains and demand remain supportive.

Airlink’s evolution – from retailer-distributor to multi-category assembler and brand partner – echoes a well-trodden path in Asian electronics. Many of today’s global names spent formative decades as OEM/ODM partners, learning to manage supply chains, build vendor ecosystems, and deliver on time for someone else’s brand before stepping up to branded products or higher-value components.

Consider the Taiwanese and Japanese experiences. Acer, which began life in the 1970s as an electronics parts and contract-manufacturing company before rising to global prominence as a branded PC maker, honed its craft by operating across the OEM–ODM–brand continuum. In Japan, consumer-electronics giants cultivated distribution and vendor ecosystems domestically while licensing and joint-venturing overseas, iterating relentlessly on process and design. Neither archetype began with a fully fledged branded hardware stack from day one; both climbed the ladder by using distribution heft, manufacturing learning curves, and partnerships as accelerants.

Airlink is pushing along that same vector in a Pakistani context. Its brand-store roll-out (Samsung, Xiaomi and the coming iPhone monostore), its wholesale distribution backbone, and its assembly lines for phones – soon laptops and TVs – create a flywheel in which each piece powers the other. Retail gives consumer insight and promotional reach; distribution secures channel access and volume commitments; assembly supplies speed, currency hedges and margin headroom.

If, as planned, white goods join the portfolio with a global OEM partner, the company will have recreated the kind of diversified consumer-electronics platform that underpinned the rise of several Asian champions, scaled to Pakistan’s market.

The Sundar tax regime and a more predictable import environment would keep the gross-margin and operating-profit improvements visible in FY2025 and 1QFY2026 intact. The company is already signalling stable margins at current levels.

Hitting the Rs8.0 billion TV target and 100,000+ laptops depends on commissioning and ramping without supply hiccups. The 10,000-unit seed shipment for laptops is a start; sustaining momentum takes retail activation and after-sales infrastructure.

NDA-bound talks with top 4–5 global brands are due to culminate by 1QCY2026/3QFY2026. The quality of those partnerships –and the degree of localisation they entail – will shape medium-term profitability.

With retail revenue doubling from ~Rs1.1 billion to ~Rs2.0 billion in a year, the store network is turning into a strategic moat, especially for launching TVs, laptops and future appliances. The three new flagship sites in Lahore and Karachi should serve as high-visibility anchors.

Airlink’s FY2025 headline slowdown owed much to external constraints on imports and a step-up in taxes, not to a loss of relevance in its categories. The 1QFY2026 inflection – higher sales, stronger gross margins, and a clearer runway for supply – suggests the down-cycle has turned. The Sundar move gives the company a structural tax advantage and a modern platform to house TVs, laptops, and white goods. Meanwhile, the Acer partnership in laptops opens a large, under-served computing market, and the TV line should benefit from Airlink’s expanding brand-store presence and established dealer relationships.

For a listed Pakistani electronics maker, this combination – distribution heft, retail control, and local assembly across multiple categories – is rare. If Airlink executes to plan, FY2026 could mark the year it scales from being a leading smartphone assembler into a diversified consumer-electronics platform, with the optionality to stretch into home appliances and to experiment at the edge with EVs and e-bikes.

The forthcoming quarters will tell. Investors will watch for quarterly sales consistently in the Rs30.0–35.0 billion range; for laptop and TV line-rates keeping to targets; for white goods agreements inked on time; and for finance costs easing as scale and rates move in tandem. But after a policy-pinched 2025, the pieces for a larger 2026 are on the table – and Airlink appears determined to

NEPRA trims K-Electric’s tariffs on lower cost assessments

The publicly listed utility is expected to take a hit to even historical earnings as the regulator assess its cost structure to have been lower than previously expected

Pakistan’s power regulator has cut K-Electric’s allowed average tariff for the current multi-year period after reassessing the utility’s underlying cost stack, a move that analysts say will materially compress revenue and force a restatement of reported profit for FY24. The National Electric Power Regulatory Authority (NEPRA) issued its decision on review motions tied to K-Electric’s multi-year tariff (MYT) determinations for generation, transmission, distribution and supply covering FY24 to FY30. The revision lowers the utility’s average determined tariff from Rs39.97 per kWh to Rs32.37, a steep Rs7.6 cut that will ripple across the company’s P&L and balance sheet for years.

The single most consequential change is the headline average tariff. NEPRA’s revised calculus knocks the figure down to Rs32.37 per kWh from the earlier Rs39.97. On K-Electric’s expected billable units, analysts estimate that this translates into an annual revenue hit of roughly Rs96 billion, or Rs3.49 per share. The brokerage notes that not every rupee of this gap drops straight to the bottom line, but a “significant portion” will weigh on earnings and could complicate capital expenditure plans, fuel procurement and compliance with debt covenants. The report adds that FY24 earnings per share of Rs0.15 will require restatement to a loss under the revised regime.

The impact is not limited to the top line. NEPRA has decommissioned two legacy generation assets – BQPS-I and KCCPP – effective on notification of the determination, and shifted the return on equity of the two remaining base plants (BQPS-II and BQPS-III) to a hybrid “take-or-pay” model with 35% guaranteed and the rest linked to actual dispatch from November 2025. Fuel “take-or-pay” will not be allowed after the current gas supply agreement ends in December 2025. Each of these steps lowers fixed income for the generation business and tightens operational risk around dispatch patterns and fuel nominations.

On the wires side, the allowable distribution loss has been cut to 9.0% (broken into 8.0% technical and 1.0% for law-and-order slippage) from 13.9% previously. Given K-Electric’s reported T&D losses rose to 16.0% in FY24

while the recovery ratio fell to 91.5%, the new cap implies a sizeable efficiency delta that the company must absorb, with direct consequences for cash flows and investment headroom. Simultaneously, NEPRA has converted the earlier dollar-linked returns on regulated asset base to PKR-based returns – 15% for transmission and 14.47% for distribution – muting the hedge that dollar indexation had provided against rupee depreciation.

Just as important: NEPRA disallowed the earlier recovery-loss allowance of 6.75% in the supply business. Instead, only a write-off mechanism capped at 3.5% will be available – and that, too, only after FY30 when the MYT period ends. The analyst’s “Supply business to post losses” table, reproduced from NEPRA’s numbers, shows a net negative margin of Rs12,450 million, underlining the pressure this element creates on working capital. The companion “Average revenue tariff” exhibit – page 4 of the note – breaks the revised Rs32.37 into Rs27.83 for power purchase, Rs2.40 for transmission, Rs2.90 for distribution, a negative Rs0.78 for supply margins, and a small prior-year adjustment.

Fuel-cost arithmetic also shifts. By lowering the reference fuel cost, NEPRA increases the incremental Fuel Cost Adjustment (FCA) that will flow through periodic bills, while reducing Tariff Differential Subsidy (TDS) claims – effects that mostly net out in the broader system but tighten K-Electric’s cash conversion timing. The report highlights that, excluding hydel and nuclear (which are not available to K-Electric), the grid cost is around Rs38 per kWh, broadly in line with K-Electric’s previous tariff. Under the new Rs32.37 determined level, the company would return the government’s earlier TDS of Rs6.0 per kWh, with about Rs1.6 per kWh recovered from consumers via FCA – another pointer to back-dated impacts on revenue recognition.

Two strategic threads run through the decision. First, cost of service: NEPRA’s review implies K-Electric’s efficient cost base should be lower than previously allowed, hence the tariff trim and tighter loss allowance. Second, risk allocation: by de-indexing returns and curbing pass-throughs and allowances, the regulator pushes more performance risk onto the utility’s shareholders. For investors, that

flips the narrative from “tariff certainty equals earnings certainty” to “tariff certainty with tougher performance hurdles.”

Pakistan’s framework assigns NEPRA the job of determining utility cost-reflective tariffs; the federal government then notifies a uniform national tariff so consumers in different provinces pay the same schedule. The gap between NEPRA’s utility-specific determined tariff and the notified uniform rate is bridged by the Tariff Differential Subsidy paid from the federal budget. In periods when government seeks to contain subsidies, or when NEPRA revises a utility’s allowed costs downward, the bridging arithmetic changes – but end-consumer bills under the uniform schedule are typically unaffected by such changes to a single utility’s determined tariff. The analyst note flags exactly this point: even with K-Electric’s determined tariff reduced to Rs32.37, consumer bills do not change because of the uniform regime; instead, the settlement flows adjust in the background.

Another pillar is the FCA mechanism. Because the fuel mix, global prices and dispatch stack vary month to month, NEPRA approves monthly or periodic Fuel Cost Adjustments that true up the difference between reference and actual fuel costs. By resetting the reference, NEPRA raises the probability that more of the difference shows up as FCA rather than sitting in the base tariff – explaining why consumers may still see moving parts in monthly bills even when the base schedule is unchanged. The MYT also embeds allowances for technical losses and, historically, a measure of recovery losses; this last element is what NEPRA has now removed, replacing it with a post-period write-off cap.

Finally, Pakistan’s system uses prior-year adjustments (PYA) to reconcile over- or under-recoveries from earlier periods. The analyst’s “Average revenue tariff” table shows only a small Rs0.02 per kWh PYA embedded in the new average, but the bigger restatement risk sits in the historical EPS that K-Electric had reported for FY24 – the note says this will now be reworked into a significant loss due to the retroactive nature of parts of the review.

K-Electric is Pakistan’s only vertically integrated, privately owned power utility, responsible for generation, transmission, distribution and supply in Karachi and adjoin-

ing areas. The company’s modern footprint includes large baseload plants like BQPS-II and the more recent BQPS-III, a 220-kV and 132-kV transmission backbone expanded in spurts over the past decade, and a distribution network serving residential, commercial and industrial customers across the metropolis. Unlike most other discos that purchase bulk power from the national pool, K-Electric’s mix blends own generation, bilateral purchases and CPPA-G draws, and it balances the city’s demand while tackling losses and recovery in a dense urban context.

The MYT construct in force through FY30 was designed to provide revenue visibility while anchoring performance improvements. The review decision resets those expectations: with loss allowances tightened, returns PKR-indexed, and legacy plants decommissioned, K-Electric must now find operating headroom via loss-reduction, recovery, fuel optimisation and system planning – all while defending share in a market where retail tariffs are nationally uniform and where the price signal for its customers now increasingly comes from the broader economy rather than utility-specific pricing.

K-Electric’s shareholder story has been unusually high-profile. The listed company is majority-owned indirectly through KES Power, a consortium historically comprising Middle Eastern and other strategic investors, while a proposed sale to Shanghai Electric Power has, for years, hovered in the background amid regulatory and governmental approvals that never quite converged. Alongside that external transaction track, there has been a long-running tussle among existing stakeholders over management control, board composition and reserved matters – a governance overhang that periodically surfaced in court petitions and public statements.

In the past year, however, there have been clear signs of a practical détente among the leading shareholders around management continuity and the day-to-day operating agenda. That truce – de-emphasising corporate manoeuvres in favour of grid reliability, loss-reduction and capex delivery – matters even more under NEPRA’s revised tariff, which shifts more performance risk onto the company. Whether or not the strategic sale path is revived, K-Electric now has to convince both lenders and regulators that execution rather than ownership noise will define the next leg. The analyst note’s emphasis on potential capex strain and covenant pressure under the new tariff only raises the premium on aligned governance.

Even as the tariff architecture tightens, K-Electric faces a market-side disruption that almost every urban utility now recognises: distributed solar. Over the past few years, Pakistan’s households, small businesses and bluechip corporates have installed rooftop photo-

voltaics at an accelerating clip, drawn by falling panel prices, a desire for supply resilience, and the ability – under net metering rules – to offset grid purchases with self-generation. For a utility like K-Electric, whose customer base includes a heavy concentration of tariff-paying commercial and affluent domestic users, the spread of rooftop solar hollows out daytime demand and flattens the load factor.

The arithmetic is unforgiving. The customers most able to afford panels are also those who contribute a disproportionate share of revenue because they pay on time and consume more units. As they shave their own peaks, the utility retains the responsibility to stand ready for evening ramps and cloudy days while collecting fewer rupees per month on average. That dynamic pushes fixed network costs onto a smaller base of kilowatt-hours, raising the long-run average cost of service unless regulation allows more explicit capacity-based charges or grid-service fees.

NEPRA’s review does not directly address distributed generation, but it compounds the pressure by dialling back allowances and hardening incentives for loss-reduction. In other words, K-Electric must simultaneously curb technical and commercial losses, keep the grid stable for a more peaky, two-humped load curve, and do so with lower regulated revenue and PKR-indexed returns. That is a much tougher operating equation than the one the MYT originally assumed.

In parallel, the FCA-driven price signal remains volatile because of imported fuel exposure in the national merit order. Volatility pushes more high-end customers toward behind-the-meter solutions such as hybrid inverters and batteries, further nibbling at unit sales. The utility’s answer has to blend non-technical loss clampdowns in high-loss pockets, smart-meter pilots where feasible, demand-side management to smooth the ramp, and procurement optimisation that reduces the effective fuel cost per kWh. The NEPRA review tilts the incentives toward that playbook.

The review order constitutes a material tightening of the regulatory compact across the business:

• Tariff reset: down Rs7.6 to Rs32.37 per kWh, implying an annual Rs96 billion revenue headwind on current volumes and a restatement of FY24 from a small profit to a significant loss.

• Generation: legacy units decommissioned; ROE moved to 35% take-or-pay with the balance dispatch-linked; fuel take-or-pay eliminated post-GSA expiry.

• Networks: loss allowance cut to 9.0%; returns PKR-indexed at 15% (transmission) and 14.47% (distribution).

• Supply: recovery-loss allowance removed; only a 3.5% capped write-off available after

FY30, with the supply segment modelled to post losses under NEPRA’s own arithmetic. The “Supply business to post losses” box on page 4 shows a net margin of negative Rs12,450 million after O&M, working capital and other income lines.

• Uniform tariff unchanged: because Pakistan operates a uniform national tariff, consumer bills do not change due to KE’s determined-tariff cut; instead, TDS flows and FCA do the balancing in the system.

For K-Electric, the investment case now pivots on execution. The company must attack non-technical losses, lift recoveries, and re-optimise the fuel basket even as it navigates a debt-covenant matrix that was built for a richer tariff. The report warns that capex could be constrained and fuel supply challenged if the revenue squeeze is not offset by efficiency gains or supportive policy moves.

Formal notification and any clarifications NEPRA issues on decommissioning timelines, dispatch-linked ROE mechanics, and the treatment of write-offs after FY30. These operational details will decide how much of the headline hit turns into cash-flow strain.

Loss-reduction trajectory through FY26. With the allowance now at 9.0%, every tenth of a point of improvement saves cash; failure to close the gap leaves a wedge that shareholders must eat. The FY24 loss print of 16.0% and a 91.5% recovery ratio underline the starting point.

Fuel and import contracts post-December 2025, when fuel take-or-pay stops. K-Electric will need flexible procurement that balances price and availability without saddling consumers with volatility.

System-side interactions: the note quantifies power-purchase costs at Rs492,990 million and shows the grid cost context that shapes FCA and TDS flows. Watching how the national merit order evolves – especially the share of cheaper sources that KE cannot access directly – remains critical for Karachi’s delivered cost. See the page 4 exhibits on average revenue tariff and power-purchase cost for the breakdowns that will drive monthly settlements.

NEPRA’s review trims K-Electric’s allowed revenues and re-allocates risk, betting that tighter loss caps, PKR-based returns and tougher supply-side rules will push the utility toward a leaner, more efficient operating model. Because consumer tariffs are uniform nationwide, end bills do not move with this decision; the pain sits instead with K-Electric’s shareholders and managers, who must deliver more with less while the city’s most valuable customers chip away at grid demand with rooftop solar. The company’s task is now clear – cut losses, lift recoveries, optimise power purchases and keep the grid steady – and the regulator has made just as clear that performance, not allowances, will be the arbiter of returns. n

Can AKD’s Arkadians rise after legal victory?

With a court case over the project dragging on since 2012, the Arkadians had become a gamble. Is it about to pay off?

By Arshad Hussain

After years of legal hurdles, allegations, and uncertainty, one of Karachi’s most ambitious real estate developments — the Arkadians — is finally set to move forward. Situated in the heart of DHA Phase VIII, facing the Golf Club and Defence Creek, the multi-billion-rupee project has been stalled by courtroom battles since 2013.

For over 10 years the case against this real estate development has tackled one hurdle after another. It has now finally received a clean chit from the Sindh High Court, and its owner, businessman and billionaire broker Aqeel Karim Dhedhi (AKD), has declared that construction will now be “in full swing.”

The landmark decision not only paves the way for the Arkadians but also underscores the complexity of Karachi’s real estate landscape, where investors’ trust is often shaken by stalled mega-projects and prolonged litigation. It also points towards some of Karachi’s most persistent problems: shrinking amenities, a complete lack of urban planning, clueless local government, and powerful real estate developers and business tycoons that can tie up land and investments to score points against their rivals.

What is the purpose of this land?

The more than decade long controversy surrounding the Arkadians project has to do with 43 acres of land that belongs to the Defence Housing Authority in Karachi.

The Arkadians project, spread across 43 acres of premium land in DHA Phase VIII, was envisioned as a state-of-the-art high-rise residential and commercial complex, comprising 13 towers, office enclaves, and utility spaces. Its prime location by the Defence Creek and Golf Club made it a flagship addition to DHA’s long-term coastal development masterplan.

As soon as construction began in 2012,

Khan, a resident of

filed a petition in the Sindh High Court claiming that the Arkadians was being built on an amenity plot. According to him, the site had originally been allocated for a park, graveyard, schools, and a sewerage treatment plant. Most cities in Pakistan and private societies have masterplans. All development is supposed to take place according to this masterplan with specific areas set out for specific purposes. While these plans are largely ignored, the courts can be compelled to act against any violation of these plans.

In Karachi, the issue is particularly sensitive. Decades of unplanned urbanization have left Karachi without any public amenities to speak of. This argument became the core of the opposition against Arkadians.

After the legal battle

The legal battle that followed has lasted more than a decade. Oftentimes the fate of projects can get tied up for a long time in courts leaving development stalled. The Arkadians is not the first such project. Perhaps no single development tells this story better than the monstrosity called Bahria Icon Tower that looms over Karachi uninhabited. Many thought the Arkadian would face a similar fate. The complications of the legal battle are long and winding, but a quick summary is useful in understanding how it ended up taking so long.

The court has noted that the documents produced by the complainants were either fake or outdated DHA records. Several times, SHC judges highlighted in their orders that the peti-

tioner was absent despite repeated summons, undermining the credibility of his case. In its defense, the DHA categorically denied that the land was an amenity plot. DHA lawyers argued that:

In the 1989 master plan, the site was tentatively marked for future use. In the 1992 plan, it was provisionally earmarked for projects called “Creek Views” and “Creek Terrace.” Finally, in the 2007 master plan, the site was approved for the Arkadians project, clearing all ambiguity.

The court agreed. In its ruling, SHC declared: “It is not an amenity plot.”

But the case dragging on for so long was not without consequence. “From the beginning, it was clear that the petitioner only wanted a stay order,” Dhedhi said in conversation with Profit. “But I stood firm. I had invested billions of rupees of my own money. This is my blood. How could I let it fail?”

Initially, in 2012, Dhedhi invested Rs 6 billion of his personal wealth to construct two out of thirteen towers. He later revealed that the underground construction for four more towers had already been completed and would be constructed soon.

But over the past 12 years, the cost of construction doubled — in some cases tripled. Accordingly, the price of each residential unit also rose threefold. What was once considered affordable luxury has now shifted firmly into the premium category.

Still, with court orders now clearing all hurdles, Dhedhi insists that investor concerns will be addressed. “Unlike Creek Marina, which was built on customer advances, Arkadians is financed with equity from my own pocket,” he said. “That is why it will not fail.”

DHA’s shattered coastal vision

The Arkadians is not an isolated project. It forms part of DHA’s broader plan to transform Karachi’s coastline into a modern high-rise corridor with international-standard residential and commercial spaces. Alongside Arkadian, two other mega projects — Creek Marina and Emaar Crescent Bay — were launched in DHA Phase VIII

Much like Arkadians, these two coastal projects have also been the subject of controversy and delays. That is one of the reasons why Akeel Karim Dhedi is so strongly reiterating that the project will go full steam ahead, because all of these projects seem to be mired in problems. While Arkadians seems to be back on track, the other two still have many problems surrounding them.

Creek Marina, for example, is a stalemate that has lasted the better part of two decades. Launched in 2006 Creek Marina was envisioned as an upscale waterfront project comprising eight luxury towers. It was being developed by Creek Marina Pvt Ltd, a joint venture with Singapore-based Meinhardt Group.

However, disputes soon erupted between DHA and the developer over design approvals, delays, and financial transparency. Investors who had paid millions of rupee in advance were left stranded as construction stalled. Multiple court cases ensued, with SHC at one point observing that the developer had failed to deliver despite “repeated opportunities.”

To this day, Creek Marina remains a symbol of broken investor confidence in Karachi’s real estate market.

In contrast, Emaar Pakistan’s Crescent Bay has seen more visible progress. The Dubaibased real estate giant began work on Crescent Bay with ambitious plans for multiple towers, a marina, and commercial centers.

While some towers have been completed, the project has not been free of hurdles. Legal disputes with DHA, environmental concerns over land reclamation, and local opposition regarding public access to beaches have slowed its pace. Still, unlike Creek Marina, Crescent Bay is alive, with several residential towers already delivered and others under construction.

Investor Sentiment: A Double-Edged Sword

The troubled histories of Creek Marina and Crescent Bay have naturally left investors cautious. Many have millions of rupees tied up in stalled projects, breeding skepticism about new launches.

From the beginning, it was clear that the petitioner only wanted a stay order. But I stood firm. I had invested billions of rupees of my own money. This is my blood. How could I let it fail?

Akeel Karim Dhedhi, developer

But Dhedhi is confident that Arkadians’ is more resilient because it has a different financing model. By this we mean that rather than relying on advance payments and bookings, his own personal equity is holding the project together. “Other projects took money from customers and still failed,” he says. “Arkadians is different. I have already put billions of rupees in. That is the guarantee.”

Real estate analysts note that this could indeed be a key differentiator. In a market often driven by speculative booking, where projects collapse once investor confidence dips, a project funded upfront by the developer carries stronger chances of survival.

Karachi’s real estate market is both lucrative and perilous. On one hand, the city of over 20 million desperately needs modern housing solutions. Demand for luxury apartments and commercial space is rising, particularly in DHA, Clifton, and Bahria Town. On the other hand, legal disputes, land title ambiguities, and governance challenges create frequent bottlenecks.

The Arkadians case illustrates this duality: a promising project tied up for years due

to a legal challenge that ultimately lacked evidence. Investors, policymakers, and developers all see this as a lesson.

For DHA, the case strengthens its stance as Karachi’s premier urban developer with a long-term vision. By demonstrating that the Arkadians site was always earmarked for development, DHA defended both its authority and credibility.

A Turning Point

With the Sindh High Court’s recent dismissal of petitions, the Arkadians is finally free to proceed. Construction, which continued at a slower pace during litigation, is now expected to accelerate.

The project’s completion would mark not just the success of one developer but also a boost to investor confidence in Karachi’s troubled real estate sector. It could also pressure DHA and other developers to resolve outstanding disputes over Creek Marina and Crescent Bay.

For Aqeel Dhedhi, the court clearance is a personal vindication. “We have built over 100 buildings in Karachi — Karim Shopping Centre, Karim Plaza, Qasr-e-Yasin. Arkadians will join that legacy,” he said.

As cranes return to the site and workers prepare to scale new towers, Karachi’s skyline may finally welcome the Arkadians. The shift comes at a time when the AKD Group is already looking to expand.

Recently, AKD Group Holdings (Private) Limited, formerly known as Aqeel Karim Dhedhi Securities (Private) Limited, has recently acquired a significant 27.95 per cent stake in Pakistan Services Limited (PSL), the operator of Pearl Continental Hotels, for Rs6.36 billion.

Aqeel Dhedhi, apart from his real estate ventures, is also part of a consortium aiming to launch a new airline, Air Karachi. The project has been in the pipeline for some time and is now awaiting final approval from the Civil Aviation Authorities before its official launch.

Air Karachi is a new Pakistani airline seeking a Regular Public Transport (RPT) license from the CAA to begin domestic and international flights. The airline is backed by local investors including Arif Habib and others and registered with the Securities and Exchange Commission of Pakistan (SECP). They plan to offer both passenger and cargo services, with initial plans to operate with three leased aircraft.

Air Karachi is a new venture in Pakistan’s aviation sector, with investors announcing an initial seed funding of Rs 5 billion. Air Karachi intends to start with domestic flights and expand to international routes in the future. The airline plans to begin operations with a fleet of three leased aircraft. n

By Abdullah Niazi

In her semi-autobiographical novel The Bell Jar, Sylvia Plath wrote what is perhaps one of the most widely quoted passages from modern literature: the fig tree analogy. In the space of less than 200 words she captures the paralyzing weight of choice.

“I saw my life branching out before me like the green fig tree in the story. From the tip of every branch, like a fat purple fig, a wonderful future beckoned and winked. One fig was a husband and a happy home and children, and another fig was a famous poet and another fig was a brilliant professor, and another fig was Ee Gee, the amazing editor, and another fig was Europe and Africa and South America … and beyond and above these figs were many more figs I couldn’t quite make out. I saw myself sitting in the crotch of this fig tree, starving to death, just because I couldn’t make up my mind which of the figs I would choose. I wanted each and every one of them, but choosing one meant losing all the rest, and, as I sat there, unable to decide, the figs began to wrinkle and go black, and, one by one, they plopped to the ground at my feet.”

If Mohsin Naqvi were sitting on that tree, he would be gorging himself sick. One can imagine him crouched in the branches, fig sap dripping as he grabs and stuffs fig after fig into his mouth, not caring for the stains they leave on his pearly white shalwar kameez. There dangles one fig that was a media empire which Naqvi downs with a glow. He pounces towards the fig that makes him Chief Minister of Punjab. The reign of terror on the unsuspecting fig tree is far from over. The old figs only halfway down his gullet, he swipes his hand to grab an entire bunch, ripping off the branch and eating the figs for federal minister, senator, and PCB chairman all at once.

Indecision, it seems, does not plague Mohsin Naqvi. In the past few years he has juggled many hats. He was tapped as Chief Minister of Punjab in a caretaker capacity after constant fighting between Hamza Shehbaz and Pervez Elahi had immobilized the Punjab Assembly. His stint, traditionally supposed to be three months, ended up being longer than the combined tenures of Sharif and Elahi. Even before a new government was sworn in, he was told to clean up the mess at the Pakistan Cricket Board, once again as a consensus candidate. As soon as his tenure as Chief Minister ended, he was also made a senator and given the portfolio of interior and narcotics control.

As interior minister and PCB Chairman, Mr Naqvi is the senior most civilian figure responsible for countering terrorism in Pakistan, and the highest cricket executive in the country responsible for turning Pakistani cricket

around. We do not know which job is tougher, but it does seem like a lot to do for one person. Perhaps the government thought there is no greater terrorism on the Pakistani people than the antics of its cricket team on the field. His tenure at the PCB has been mixed. On the one hand he has positioned himself as a players’ chairman. Despite having no background in cricket he regularly hosts the team for dinners, drops by before games to give them encouragement, and by all accounts is very friendly with them. Profit profiled Mr Naqvi back in 2019 before he rose to national prominence. Even then, as the CEO of a media empire you could see this man was charming, genial, and had impeccable manners. But behind that exterior is a get-shit-done attitude that has clearly served him well. At the PCB, his warmth towards the players has not stopped him from making major reshuffles and even cancelling NOCs for players to go play franchise cricket in Australia. He has also stood up to the hegemony of Indian Cricket with a dramatic flair you do not really see in the stoic world of cricket.

Perhaps nothing will shape his legacy more than the chaotic week that just ended. In the span of 48 hours Mohsin Naqvi’s PCB announced it would add two more teams to the HBL PSL, was expanding the tournament to six venues, and appointed incumbent test captain Shaan Masood to an executive role at the board where (it looks like?) he might be responsible for negotiating his own contract as well as those of his fellow players. Then there was the little matter of terminating the contract of the Multan Sultans, the HBL PSL’s newest and most expensive franchise. The reason behind the termination was a campaign by the team’s owner, Ali Tareen, in which he raised concerns over how the HBL PSL was being run. Mr Tareen had been running the podcast and interviews circuit giving his opinion on why he thinks the HBL PSL has been slipping, and giving his suggestions for what needs to change.

That, it seems, has rubbed the PCB the wrong way. They issued a legal notice to Tareen and said they were suspending his ownership of the team, and threatening to blacklist

him from owning an HBL PSL team again. Realistically speaking the fiasco will not do much harm to Ali Tareen. If anything, being blacklisted might end up saving him a lot of money. At the 10 year mark of the HBL PSL, all of the tournament’s franchises are up for rebidding. As per the team contracts, each franchise owner will have the chance to rebid for their team. They will have to pay a new franchise fee which will depend on what an independent evaluator determines that team’s value is. At the very least the existing owners will have to pay a 25% markup unless the new valuation is higher. This has been an issue that has simmered in the background of the HBL PSL for some time now. The blow-up between Ali Tareen and the PCB is the first public battle around this subject.

The fact that it is being fought over petty instances and matters of personal taste is only appropriate because this is, after all, the theatre of the absurd known as Pakistan Cricket. What does make it significant, however, is that it marks the first real challenge for Mohsin Naqvi. Ever since he became PCB Chairman he has run the board with complete confidence and control. The fact that he has been able to sit and even consult with former constantly bickering chairmen Najam Sethi, Ramiz Raja, and Zaka Ashraf in the same room shows that Mr Naqvi knows he is not going anywhere. He has a mandate to run the board and he has the political power to back it up.

But Ali Tareen offers a new kind of opposition. Oxford graduate, philanthropist, farmer, sugar baron, and most importantly a rich kid, Ali Tareen can throw his weight around. His family is also politically influential and has been for much longer than Mohsin Naqvi. While Mr Naqvi is enjoying a particularly good run of form (to borrow poorly from a sporting term), Mr Tareen has what can in these pages only be called f-you money.

For the past seven years, he has been running consistent losses to maintain ownership of the Multan Sultans. Part of the reason he has been running these losses is the way the HBL PSL is structured. The other reason is his love for the game. To Ali Tareen, staying closely involved in cricket is well worth the money,

This isn’t just about the Multan Sultans. As a league the PSL has to give ownership. Right now we are kind of renting the team from the PCB every single year. If we bring in a new partner to invest in the franchise we have to go to the PCB first. If we want to change ownership we have to ask them too,” Tareen said last year. “They are the real owners. And that is why there is some hesitation to invest further

which is why fighting this fight is well worth his time. Nowhere is this exemplified more than in the sarcastic “apology video” he posted in the aftermath of the PCB’s announcement, where he diligently tears up the legal notice on camera. The only question: exactly how much will this hurt the HBL PSL?

What’s at risk?

Ten years on, the HBL PSL has clearly been a lifeline for Pakistan cricket. For years it has provided large sums of revenue to the board and showcased Pakistan’s ability to host large-scale tournaments. Its role in bringing international cricket back to Pakistan cannot be calculated.

The HBL PSL is the greatest asset that belongs to Pakistan Cricket.

Just how great? Look at it this way. In 2018, the PCB reported an overall loss of Rs 53 lakh. The HBL PSL saved them from a bigger hit. The tournament brought in Rs 2.2 billion in revenue, generating 43% of the board’s earnings that year. A big part of this revenue were

Ali Tareen, owner of Multan Sultans

the franchise fees paid by the team owners. The tournament itself generated Rs 1.3 billion, and the PCB also took Rs 56 crores from this as their cut, leaving the teams to split Rs 74 crores six ways.

The franchise owners were naturally not very happy with this. A colourful assortment of characters including media tycoon Salman Iqbal, Haier and MG owner Javed Afridi to just name two of the more public figures to own teams, the resistance was almost immediate. But that did not stop the PCB from continuing to milk the tournament as much as it could.

In fact, in 2019 the PCB made a profit for the first time in years. The PCB saw revenues of Rs 11.3 billion, and a before tax profit of Rs 5.34 billion. The year also saw the HBL PSL grow, posting a total revenue of Rs 3.31 billion for the PCB. The tournament’s central revenue pool also improved, swelling to Rs 2.78 billion of which the board took a cut of just over Rs 1 billion. This left the franchises with just under Rs 30 crores each, while they had paid the PCB a cumulative Rs 2.12 billion in franchise fees.

This has continued for some years now. Since 2018, the PCB has been using revenues from the HBL PSL to slowly shore up their cash reserves. In 2018, the board had a general fund bank balance of close to Rs 9 billion. By 2019 this rose to Rs 13 billion, and by 2020 they had gone to Rs 17 billion. At the end of 2023, this figure stood at over Rs 20 billion. These reserves also allowed the board to get through the difficult (and expensive) era of Covid-19 when bubbles had to be maintained and there were no crowds at games.

Overall the HBL PSL became a financial lifeline for the PCB. Over the past six years, the tournament has year in and year out been the largest source of revenue for the cricket board. In certain years it has provided up to half of the entire revenue the board saw come into its coffers. Even in the years where the PCB made a loss, the HBL PSL was always a profitable venture for the board.

This trend changed last year when

money from hosting international tournaments like the Asia Cup in 2023 and more recently the Champions Trophy became Pakistan Cricket’s biggest earners. However, it would be remiss not to mention the role the HBL PSL has played in bringing international cricket back to Pakistan. The tournament convinced foreign players to come play in Pakistan and opened the doors to this revenue.

It isn’t just Multan Sultans

Throughout all this, the franchises have not been particularly happy and this isn’t the first confrontation between them and the board either. The tournament has a sharing based revenue system. A late entrant on the scene, Multan was added to the HBL PSL tournament two years later. Back when the PCB had first auctioned off the rights to teams in 2015, there had only been five spots to vie for. The PCB sold the rights to these teams for $93 million for a 10 year period. The most expensive team to be sold was Karachi Kings for $26 million, followed by Lahore Qalandars for $25 million, Peshawar Zalmi for $16 million, Islamabad United for $15 million, and the Quetta Gladiators for $11 million. Since the teams were sold for a 10-year period, the total cost was payable over 10 years in the form of a yearly franchise fee equivalent to 10% of the team’s value. Essentially, each franchise owner would rent out the use of the franchise for the year for a fixed price.

This was also a failsafe. In case the tournament tanked or one of the owners decided the price they paid had been too high, they could duck out after a year or two and sell the franchise to someone else. But the tournament was almost an instant success. So much so that when Multan Sultan became the sixth team added to the tournament’s third edition it sold for a whopping $41.6 million – and that too only for an eight year period to the Schon

group. That meant the Schons were paying an astounding $5.2 million a year to the PCB to keep the Multan Sultans which was double the price that Salman Iqbal was paying to keep Karachi Kings. And that is just the franchise fee — all the other operating costs from paying players and staff to marketing are not included in this.

However, the $5.2 million franchise fee was too much for Asher Schon to keep up with, and after one year the PCB terminated the Schon group’s ownership of the Multan Sultans on good terms. Even this, however, did not stop the price of the team from rising. Initially sold for a $41.6 million price tag for eight years, the team was now sold for $45 million for seven years to Aalamgir and Ali Khan Tareen. That meant the Tareens would be paying an astonishing yearly franchise fee of $6.35 million each year to keep ownership of their team.

This has made Multan Sultans wildly unprofitable. While some of the other teams like Peshawar, Quetta, and Islamabad have managed to make profits, the larger teams like Lahore, Karachi, and Multan have continued to struggle and the biggest problem has been for Multan.

And as we have gone into painful detail to explain in the past, the HBL PSL has been a financially lucrative proposition for the PCB, for the sponsors, and for the players as well. It hasn’t, however, been particularly lucrative for its biggest investors — the franchise owners. With rebidding in sight and two new teams set to be added to the mix to further divide the revenue pool, the franchise owners are feeling a shift. The conflict between Mr Tareen and Mohsin Naqvi’s PCB is a manifestation of a larger problem: the PCB’s inability to handle even the most harmless of constructive criticism and the growing dissatisfaction among franchise owners.

Profit reached out to a number of franchise owners. Ali Tareen did not respond to our messages. One team owner spoke but on the condition of anonymity. The others declined to comment on the issue. But the one thing all of the owners have been united on has been the right to ownership in perpetuity. This has been a key demand since 2021 when the franchises renegotiated their share in the tournament’s central pool. While they were given a bump from 80% share to 95% share, the demand for perpetuity was refused. Remember, the teams were given to the franchise owners at these rates back in 2015 for 10 years with Multan being given to the Tareens in 2019 for seven years. That means after the 10th edition of the tournament in 2025, the teams will be up for rebidding. The current owners will have the opportunity to pay an increased franchise fee, which will be calculated as the existing fee + 25% or 25% of market value of the franchise, whichever is higher. If any of the owners refuse to do this, the team will go up for bidding again.

Earnings

from International Tournaments in 2023

Asia Cup

$3.57 million

ICC Men’s T20 World Cup

$250,000

ICC Women’s U19 T20 World Cup

$25,000

ICC Women’s T20 World Cup

$50,000

bought rights to the team in 2015 or 2017 took a risk and now that the tournament has taken off they should have their reward.

Essentially this means that the franchise owners are less owners and more tenants. The PCB has the final rights to the teams and this gives them an undue advantage in what should be a simple business partnership.

In an interview with Profit last year, Ali Tareen brought up this exact issue and the difficulty of negotiating with the PCB. Back then he had said he felt like Sisyphus.

“This isn’t just about the Multan Sultans. As a league the PSL has to give ownership. Right now we are kind of renting the team from the PCB every single year. If we bring in a new partner to invest in the franchise we have to go to the PCB first. If we want to change ownership we have to ask them too,” Tareen said last year. “They are the real owners. And that is why there is some hesitation to invest further.”

This is a bigger issue than it might seem at first glance. The way franchise sports tournaments work is that one expects the team owner to invest in their teams so that they can then make a profit off of it. This investment further increases the value of the tournament and helps in growing it. In this scenario, however, since the owners are really only tenants they do not particularly want to pour more money into something that is not an asset. The thinking is that early entrants that

“Karachi, Lahore and Multan are all making losses at the current franchise fees. The only way to grow the tournament is for the teams to invest further. When you’re already posting losses and you don’t even own the asset and are only renting it, why would you pour more money into it? Unless we own the asset we will not want to invest more. As the teams grow the desire to invest in it will also increase. That is the point of being an early mover. You get that ownership for cheap and then help grow a new brand,” said Tareen.

“If the team is an asset I will invest more. So how do we convert this into a perpetuity model? That is the question. Because that is when the tournament really blossoms. That is when you’ll have owners investing in stadiums and paying players more money. I think this is the future of the HBL PSL.”

Clearly that future has not quite panned out. The fight between Ali Tareen and the PCB has taken a strange and almost comic turn that will do at least some damage to the HBL PSL brand. Prospective franchise buyers might think twice about doing business with the PCB. For now, the board under Mohsin Naqvi is empowered and clearly not particularly tolerant of criticism. While Mr Naqvi has shown some measure of steel in his dealings with the BCCI, it is hoped he treats his own countrymen and investors in the PCB’s biggest earner with more compassion and leeway. As far as Ali Tareen is concerned, he has made it clear he is not taking this matter lightly and will fight it. All we can hope for in the meantime is that the rest of the fight takes place behind closed doors, which is where it should have started in the first place. n

Who can catch NCP cars? FTO flags jurisdiction overreach

Ombudsman says provincial actions violate Customs Act, 1969; calls for restoration of federal jurisdiction over seized vehicles

Profit Report

Somewhere on a dusty highway in Khyber Pakhtunkhwa, a police constable waves down a gleaming Toyota Fielder with a suspiciously foreign chassis number, not to mention the car’s non-existence in Toyota Indus’ fleet of Pakistani vehicles. Upon inspection, it becomes apparent that the car may well be smuggled or, in other words, Non-Customs Paid (NCP).

What does the constable do? Within minutes, the vehicle is confiscated and impounded by the police. The owner is later fined or convicted, and a receipt is issued by the provincial Excise Department. Much later, depending on how the case was handled, either the police or the provincial excise department decides the fate of the car, and the story ends there.

Any car that comes into Pakistan is liable to pay customs duty. And under the Customs Act, 1969, any vehicle that enters the country without payment of those duties falls squarely under the jurisdiction of the Customs Department. Section 168 empowers Customs to seize such vehicles, Section 170(2) mandates that any agency that detains a suspected smuggled vehicle must immediately hand it over to Customs, and Section 185-B makes it clear that only a Special Judge of Customs has jurisdiction to try such offences.

So does this mean that the good police constable mentioned earlier is subverting the legal process for some personal gain? The simple answer is, no, and here lies the problem. Under the Khyber Pakhtunkhwa Road Checking, Seizure and Disposal of Motor Vehicles Rules, 2015 and the Balochistan Road Checking, Seizure and Disposal of Motor Vehicles Rules, 2025, provincial police and excise departments have been given overlapping powers to stop, seize, and even dispose of vehicles suspected of being NCP. In practice, this means that the provincial authorities are exercising powers that, constitutionally and legally, belong to the federal Customs Department.

A recent ruling by the Federal Tax Om-

budsman (FTO) has unearthed this far-reaching problem after a complaint from the Directorate General of Intelligence & Investigation-Customs (I&I) was lodged. The FTO upon noticing found that provincial police and excise departments in Khyber Pakhtunkhwa and Balochistan have been independently seizing, prosecuting, and disposing of smuggled vehicles, an action that violates both federal law and the Constitution.

According to the FTO’s findings, provincial laws since at least a decade ago, gives provincial authorities overlapping powers to check, seize, and even auction NCP vehicles. The ruling describes these laws as “inconsistent with the federal Customs Act, 1969” and says they have “caused loss of federal revenue and undermined anti-smuggling enforcement”.

In such a scenario, the aforementioned good police officer may not be as good as we suggested, because once the dust clears the police department can choose the manner in which they want to dispose the vehicle, thereby giving it their own department or auction-

ing it off under favourable conditions.

To make matters worse, police has found another workaround. According to the FTO ruling, some courts in Punjab have been granting superdari(temporary custody) of NCP vehicles under Section 550 of the Criminal Procedure Code, allowing such vehicles to be retained or disposed of through provincial mechanisms instead of being handed over to Customs.

All these practice, as the Federal Tax Ombudsman (FTO) observed, has caused substantial revenue loss to the federal exchequer by depriving it of the duties and taxes owed on these vehicles.

Why the problem exists?

At the operational level, there is no unified or real-time reporting mechanism for impounded NCP vehicles between provincial departments and the Federal Board of Revenue (FBR) or Customs. Vehicles seized under provincial laws

often vanish into administrative limbo some re-registered under provincial excise authorities, others auctioned off locally, and many simply disappear from official records.

The FTO’s ruling describes this as a systemic breakdown of federal control over the anti-smuggling regime. Customs’ enforcement structure, already thinly spread across porous borders, is being undermined by provincial authorities acting beyond their constitutional remit. The report notes that the Customs Act, 1969 is a federal statute falling under the Federal Legislative List, Part I (Item 43: Imports and Exports across Customs Frontiers), giving Parliament and federal institutions exclusive jurisdiction over customs matters.

However, by creating provincial rules that allow local authorities to seize, prosecute, and even dispose of imported vehicles, the provinces have, perhaps inadvertently, stepped into an area reserved exclusively for the federation. This, the FTO notes, is in violation of Article 143 of the Constitution, which holds that in the event of inconsistency between a provincial law and a federal law, the latter shall prevail.

The FTO further observed that such rules “have created legal, financial, and operational handicaps and distortions, leading to loss of federal revenue and undermining anti-smuggling enforcement.” Provincial rules effectively create a parallel legal structure for dealing with smuggled vehicles, one that lacks transparency, uniformity, and federal oversight.

At the heart of the problem is the concept of jurisdictional overreach — provincial authorities using road-checking and excise powers to tackle what is, in legal terms, a federal fiscal offence.

This not only creates legal confusion but also undermines deterrence: offenders can exploit procedural inconsistencies to retain or regularise smuggled vehicles through provincial channels. According to the order, whenever a provincial authority such as the police or excise department intercepts or detains a suspected Non-Custom Paid (NCP) vehicle, it must immediately report and hand over the vehicle to the nearest Customs House or Customs Collectorate.

This ensures that the vehicle enters the formal adjudication process prescribed by customs law, where the owner or possessor is given a legal opportunity to pay the due customs duty and taxes if eligible. The FTO made it clear that provincial authorities are not empowered to dispose of or auction such vehicles on their own, as this violates federal jurisdiction. Their role is limited to detection, reporting, and safe custody until transfer to Customs, after which all further proceedings must be handled exclusively by federal customs officers.

The loophole of superdari under the CrPC compounds this dysfunction. Once a lower court orders a vehicle to be released on superdari to the police or a private individual, Customs’ jurisdiction is effectively neutralised. Vehicles under criminal trial for smuggling are thus released without the payment of duties, defeating the very purpose of the Customs Act. The FTO ruling explicitly highlighted this abuse, noting that despite repeated communications from Customs Collectorates, provincial compliance has remained “poor.”

The absence of inter-agency coordination also has operational consequences. Customs maintains national intelligence and enforcement systems designed to track smuggled goods and vehicles through its WeBOC (WebBased One Customs) system and anti-smuggling operations wing. But once a provincial department seizes a vehicle independently, that information never reaches the federal database. This creates blind spots in the national anti-smuggling grid and prevents Customs from pursuing high-value networks that profit from importing and circulating NCP vehicles.

The result is a fragmented enforcement landscape, where parallel authorities operate under separate laws, creating space for manipulation and corruption. Provincial excise departments earn impoundment or disposal fees, the police exercise discretionary seizure powers, and the federal exchequer loses millions in unpaid duties while smuggling networks continue to exploit porous borders and weak inter-agency controls.

But simply pointing out one or two misseized vehicles isn’t enough. The terrain of the problem is both legal and geographical, especially in Khyber Pakhtunkhwa (KP), where rugged mountain passes, border with Afghanistan and tribal district geography make enforcement particularly difficult.

To make matters worse, NCP vehicles were allowed to operate in Malakand Division and the former Federally Administered Tribal Areas (FATA) because these regions were granted special tax exemptions under Article 247 of the Constitution and the PATA Regulations.

These areas were considered “non-settled” regions, falling outside the full jurisdiction of Pakistan’s federal taxation and customs regime. To maintain local goodwill and political stability in a historically volatile border zone, successive governments informally tolerated the inflow of duty-unpaid vehicles from Afghanistan and other border crossings, treating them as a local privilege rather than a customs violation.

Even after the merger of FATA with Khyber Pakhtunkhwa through the 25th Constitutional Amendment in 2018, enforcement has remained inconsistent. Many residents continue to use NCP vehicles because they were

acquired decades ago and because regularisation schemes have repeatedly been postponed or politicised.

The KP Excise & Taxation Department has itself compiled data on over 110,000 non-custom paid (NCP) vehicles, and media reports claim that this falls short by more than 100%.

The scale of the problem matters. Some reports estimate that there are as much as 450,000 NCP vehicles in Pakistan, while official provincial registries account for only about 128,000.

Taken in context of Pakistan’s current auto industry, these numbers suggest that beyond individual seizures, a systemic bypass of customs duties and regulatory oversight is underway, one that distorts the domestic auto industry (which pays full duties), and drains federal resources.

The FTO’s proposed solutions:

In light of this, the FTO offers a clear set of recommendations:

n Direct the federal Revenue Division to instruct the Member Customs (Operations) at FBR to issue “D.C.” letters to sensitise the federal Secretary Law and all provincial Secretaries, IGPs and Excise/Taxation DGs to annul or amend conflicting provincial rules (such as the KP Road Checking, Seizure and Disposal of Motor Vehicles Rules, 2015 and the Balochistan equivalent of 2025) that are repugnant to the Customs Act, 1969.

n Require provincial authorities to coordinate with the Chief Collector of Customs (Enforcement) Islamabad to surrender all detained/ seized NCP vehicles or those with tampered or cut & weld chassis to customs under Section 170 of the Customs Act, 1969.

n Amend Section 170(2) of the Customs Act to explicitly include “officer of provincial Excise Department or of any other Department under the provincial government” after “police officer” — thereby formalising the hand-off process.

n Set a compliance deadline of 90 days and invoke Article 184(3) of the Constitution for Supreme Court guidance if necessary.

These recommendations are necessary, however, it is clear that they focus heavily on legal harmonisation and hand-over mechanics, but less on real-time intelligence sharing, reporting infrastructure, and inter-agency capacity building especially in provinces like KP where NCP vehicle numbers are massive.

The FTO itself notes that no effective mechanism currently exists for real-time reporting of impounded NCP vehicles and that provincial compliance “remains poor.”, yet it assumes enforcement can improve once duplication is removed. How? We cannot say. n

Imported perfumes are expensive.

The fashion retail industry has an answer

Clothing and apparel brands in Pakistan are all getting into the perfume business as prices of imported brands skyrocket

Profit Report

If you walk into any major clothing brand in Pakistan today, the chances are high that you’ll be greeted by an entire section dedicated to perfumes. This wasn’t always the case. A few years ago, fashion retailers in the country were primarily focused on apparel and accessories. Now, however, it’s not unusual to see Khaadi, Sapphire, Sana Safinaz, and a growing list of other brands offering their own line of perfumes.

The shift reflects broader changes in Pakistan’s fragrance market, which has evolved significantly due to economic factors, changing consumer tastes, and the rising cost of imported goods. Local perfumes, which were once considered an afterthought in the industry, have steadily gained prominence in recent years. This surge in demand for local alternatives points to a clear shift in consumer behavior: a growing preference for affordable, locally manufactured products over expensive imports.

In this article, Profit examines the rise of local perfume brands, particularly those

launched by clothing retailers, reflecting changing trends in consumer habits and what this means for the fragrance market in Pakistan. We will also look back at the origins of this market, analyze its current state, and highlight the key factors contributing to the growth of local brands.

How J. changed the scene

Before the early 2000s, Pakistan’s fragrance market was relatively small. The few options available were either imported high-end perfumes or locally produced attars. These traditional fragrances, extracted from flowers, spices, and other natural ingredients, had a long history in Pakistan and were deeply intertwined with cultural and religious practices.

Attar was and very much still continues to be associated with Islamic tradition because this was also the kind of scent used in Arabia at the time of the birth of Islam, and the techniques to extract it were later improved in different Islamic civilizations. The association between attar and religion was so strong, in

fact, that religious figureheads such as Maulana Ilyas Attari (also known as Maulana Ilyas Qadri) of the Dawat e Islami set up businesses selling the fragrance in small vials which were then bought by devoted followers.Most mosques in Pakistan have stalls outside them every Friday where along with tasbeehs, caps, and miswaks, attar is also sold.

However, the local perfume scene wasn’t entirely limited to attars. In cities like Lahore, local perfume makers operated in markets such as Lohari Gate and Shah Alam Gate. These makers produced bespoke perfumes tailored to local preferences, though the lack of branding and marketing meant that these products remained largely regional and rarely reached a broader audience. Imported perfumes, which were mostly available to a limited, more affluent urban demographic, were often seen as status symbols. At the same time, the market for locally produced fragrances was underdeveloped, with no significant attempts to capitalize on it in the retail industry.

That all began to change in 2005 when Junaid Jamshed launched a fashion brand by the name of J. The former pop sensation turned religious preacher was the latest entrant in

a fast changing fashion landscape. While initially focused on clothing, the brand quickly made the transition to include perfumes, tapping into an emerging market of locally produced scents. Jamshed’s brand recognized an untapped opportunity: offering high-quality perfumes at affordable prices. His decision to launch fragrances that were similar to attars but packaged as premium, gift-worthy products proved to be a successful formula.

J. didn’t just stop there—it began marketing its fragrances with celebrity endorsements from prominent figures like Adnan Siddiqui, Wasim Akram, Shahid Afridi, and Sania Mirza. This partnership with celebrities helped solidify J.’s position in the market and demonstrated that local perfumes could attract a broad consumer base.

Local brands vie for attention

By 2024, the landscape of the fragrance market in Pakistan had shifted dramatically. The mass fragrance market had grown to a value of Rs 2.8 billion, a 31% increase in current terms from previous years. Local brands, such as J., Bonanza Satrangi, and Hemani, have captured significant shares of this market, offering products that appeal to the middle and upper-middle classes who are looking for both quality and affordability.

A significant factor behind this shift is the rising cost of imported perfumes. High import duties (which have gone up to 25% this year) and the devaluation of the Pakistani rupee have made foreign perfumes increasingly expensive. As a result, the demand for locally manufactured alternatives has grown, with consumers increasingly turning to products that are priced more competitively. While the premium fragrance market remains niche, local brands have found success by offering accessible and quality options at a fraction of the cost

of their imported counterparts.

According to Euromonitor’s 2024 report, Junaid Jamshed’s brand continues to hold a leading position in the market, though its share has slightly declined to 9.6% in 2024, down from 11% in 2023. Despite the challenges posed by new competitors, J. remains the frontrunner due to its established brand loyalty, wide retail network, and competitive pricing.

Brands such as Bonanza and Hemani have also grown their presence in the fragrance market. Bonanza Satrangi, for instance, has managed to carve out a space by offering a broad range of fragrances that cater to various customer preferences, although it still lags behind J. in terms of packaging and formula quality. Meanwhile, Hemani Group has focused on offering “premium” perfumes at affordable price points, targeting consumers looking for high-end options without the steep price tag.

What does the data say?

Euromonitor’s analysis of Pakistan’s fragrance market reveals several important trends. In 2024, the retail value of fragrances in Pakistan reached Rs 2.8 billion, with mass fragrances accounting for PKR 2.4 billion of that total. Local brands, such as J., have been leading the charge, with their share of the market being further bolstered by partnerships with contract manufacturers like Alpha Labs and Khwaja Arisols. These collaborations have allowed local brands to scale up production, ensuring quality while maintaining cost-efficiency.

Despite the dominance of mass fragrances, the premium segment is also showing signs of growth, albeit at a slower pace. In 2024, the premium fragrance market was valued at Rs 40 crores, making up a smaller portion of the overall market. The increasing availability of midrange perfumes, offering a blend of quality and affordability, has attracted a wide customer base, particularly in urban centers. In terms of brand shares, Rasasi Perfumes Industry LLC holds the largest share of the market with 10%, but the local dominance is clear, with companies like Junaid Jamshed (9.6%) and Bonanza (6.1%) holding strong positions. The entry of other clothing brands such as Khaadi and Sapphire into the perfume market has further fueled competition, pushing local brands to innovate and refine their offerings.

Changing Consumer Preferences

The rise of local perfumes is also a result of changing consumer behavior in Pakistan. According to a survey conducted by Profit, many respondents expressed a preference for local perfumes due to their affordability and quality. “Although no local perfume had replaced my imported ones, I preferred using local fragrances for daily wear,” shared one consumer. This shift in preference demonstrates that local perfumes are no longer seen as inferior alternatives but as legitimate contenders in the fragrance market.

The growth of local perfumes is also driven by increased consumer awareness. As more people are exposed to global fragrance trends through social media, local brands are using influencer marketing and celebrity endorsements to boost their appeal. “It’s a matter of perception versus experience. The general perception across the country has been that imported products are of better quality. However, after trying local fragrances and experiencing their quality, this perception changes,” said an industry insider.

Moreover, the demand for local perfumes is not just about pricing but also about cultural relevance. Scents inspired by traditional ingredients such as jasmine, oud, and rose have resonated strongly with local consumers, who find these fragrances more aligned with their tastes. The rise of attars, a product often seen as linked to religious and cultural practices, has also seen a resurgence, particularly among consumers seeking products that feel more authentic.

The Future of Local

Perfumes:

Growth and Opportunities

Looking ahead, the growth of local perfumes in Pakistan is set to continue. With retail sales projected to grow from Rs 2.8 billion in 2024 to Rs 5.6 billion by 2029, the local fragrance market shows promising signs of resilience. As disposable incomes rise and urbanization accelerates, the demand for both mass and premium fragrances is expected to increase.

Local brands are likely to continue gaining ground as they offer more accessible price points. The market for mass fragrances, which is expected to see consistent growth, remains the largest segment. However, as more consumers seek longer-lasting and branded fragrances, the premium segment is likely to witness further development.

For local brands, innovation will be key. The introduction of new scent profiles,

seasonal launches, and eco-friendly packaging will provide fresh opportunities. Brands that offer fragrances inspired by local culture and adapt to the preferences of younger consumers will find increasing success.

As the local perfume market in Pakistan continues to grow, the competitive dynamics will evolve. What was once a market dominated by imported brands is now an arena where local players are leading the charge, with an eye on affordability, quality, and cultural relevance.

How can local brands stand out?

The local perfume market in Pakistan, while growing, is also marked by fierce competition. Junaid Jamshed’s brand, J., has established a strong foundation in the industry over the years, but it faces significant challenges from new and emerging brands. These competitors have taken different approaches to attract customers, often focusing on aspects that J. initially pioneered, such as affordable luxury and fragrance packaging.

One of the most notable factors driving the success of local brands is their ability to adapt to shifting market dynamics. While J. remains the dominant player in the market, the company’s competitors, like Bonanza Satrangi and Hemani, have steadily increased their market shares by diversifying their product offerings. Bonanza, for example, has expanded its fragrance line to include different scent profiles, ranging from fresh and floral to oriental and musky, catering to a wide spectrum of preferences.

Hemani has found its niche by offering fragrances that are a hybrid between local scents and international ones. The brand’s strong focus on natural ingredients has attracted customers who are increasingly aware of the benefits of organic and chemical-free products. This aligns well with the rising interest in sustainable products in Pakistan, as consumers are becoming more conscious of the impact of their choices on the environment. The move toward natural and organic scents is seen as a reflection of a larger, global trend that has taken hold in the fragrance market, with sustainability becoming an important value for consumers.

The packaging, another important aspect of fragrance marketing, plays a crucial role in how these brands differentiate themselves. J.’s perfume bottles, for instance, have been recognized for their elegant, gift-worthy designs. This has made J. perfumes a popular choice not just for personal use but also as presents. However, other brands have recognized the importance of this aspect and are focusing on innovative, yet affordable, packaging designs that catch the eye of consumers. Some brands, such as Bonanza, have incorporated traditional elements, like

intricate designs and Arabic calligraphy, into their packaging, which resonates with local consumers.

The wide availability of perfumes in fashion retail stores also contributes to the growth of the market. By positioning perfumes as an extension of the clothing line, brands are able to create a more immersive shopping experience.

Fashion retailers that offer both clothing and fragrance products have tapped into a larger consumer base. This vertical integration strategy enables these brands to maintain control over pricing, product availability, and customer experience.

Retail strategy

The retail strategy of local perfume brands has played a pivotal role in their growth. Fashion retailers such as Khaadi, Sapphire, and Sana Safinaz have effectively integrated perfumes into their retail operations, offering them alongside their clothing lines. This strategy

not only strengthens the brand’s market position but also creates a one-stop shopping experience for consumers. By diversifying their product lines, these brands appeal to a broader customer base, particularly those who might not have previously considered purchasing perfumes.

In addition to physical retail stores, online sales have become a crucial channel for local perfume brands. According to Euromonitor, e-commerce platforms have seen significant growth, especially among younger consumers who appreciate the convenience of online shopping. Brands have leveraged social media and influencer-led marketing to connect with this audience. The use of digital marketing strategies, including flash sales, seasonal promotions, and celebrity endorsements, has proven successful in driving online fragrance sales. Platforms like Instagram and TikTok have become essential tools for creating brand awareness and fostering a direct connection with potential buyers.

The ability of local brands to leverage

both traditional retail stores and e-commerce platforms highlights the evolving nature of the fragrance market. Consumers can now choose between shopping at brick-and-mortar locations or purchasing perfumes from the comfort of their homes, allowing for greater flexibility and convenience.

Competitive on quality

While the shift toward local perfumes can largely be attributed to affordability, it’s important to note that local fragrances are not just cheaper versions of international products. Local brands have worked hard to ensure that their perfumes offer value for money while maintaining a certain level of luxury. The concept of affordable luxury has resonated with the growing middle class in Pakistan, which is looking for high-quality products at competitive prices.

Perfumes by brands like J., Bonanza,

and Hemani are positioned as aspirational products that offer a taste of luxury without the hefty price tag associated with imported perfumes. For example, J.’s fragrances are often marketed as high-end gift items, thanks to their elegant packaging and celebrity associations. Meanwhile, Bonanza’s fragrances provide a wide range of affordable options that can be used daily, making them an attractive choice for people who want to smell good without breaking the bank.

Interestingly, as consumers become more accustomed to purchasing local perfumes, they are willing to pay a premium for fragrances that deliver both quality and style. The demand for high-quality local perfumes is being met by brands that have successfully captured the essence of luxury without the associated costs. This creates a unique value proposition for consumers who are becoming more price-conscious in light of Pakistan’s ongoing economic challenges.

The growing popularity of local perfumes can also be attributed to changing

consumer behavior. According to the survey conducted by Profit, many consumers who initially bought imported perfumes are now opting for local alternatives. “I don’t have a favourite yet, and my go-to fragrance is still Paris Hilton, because c’mon, nothing smells like it. However, I think these local perfumes do smell quite nice and offer a good-quality affordable option,” shared one respondent.

This shift is indicative of a broader trend of consumer acceptance of local brands. The perception that imported products are superior is being challenged by the increasing quality of local alternatives. “It’s a matter of perception versus experience. The general perception across the country has been that imported products are of better quality. However, after trying local fragrances and experiencing their quality, this perception changes,” explained an industry insider.

For many consumers, local perfumes have become a practical choice. While imported fragrances may offer longer-lasting scents, local perfumes are often perceived as better suited for daily wear due to their affordability. Consumers are increasingly comfortable incorporating these local fragrances into their daily routines, as they offer both quality and value for money. This attitude is particularly prevalent among young professionals and students who have budget constraints but still want to indulge in luxury products.

Can they make the most of it?

Looking ahead, the future of local perfume brands in Pakistan seems promising. As the market continues to grow, local brands are poised to capitalize on the rising demand for both mass and premium fragrances. The increasing disposable income of the middle class, combined with the shift towards affordable luxury, will continue to drive the growth of the fragrance market.

The rise of local perfumes is also tied to a larger trend of consumer nationalism, with more people seeking products that are made locally and reflect their cultural values. As local brands continue to innovate and refine their offerings, the gap between imported and local perfumes will continue to narrow, giving consumers more choices than ever before.

For local perfume brands, the key to continued success will be maintaining a strong focus on quality, innovation, and affordability. By continuing to listen to consumer preferences and adapting to changing trends, these brands can solidify their position in the market and ensure long-term success. n

Personal finance experts advise 4-hour daily commute for electric car purchase to start making financial sense

By Profit

The nation’s personal finance experts this week advised owners of electric vehicles to start making minimum daily commutes of four hours in order for them to justify their expensive purchases.

Convening at a seminar in Islamabad jointly organised by Profit Magazine and PakWheels, there seemed to be a consensus amongst the nation’s personal finance analysts about the need to go out of the city for the purchase to be justified not only to one’s family and friends but also oneself.

“We’re talking about a price differ-

ence of about Rs 3 million maybe, in some cases Rs 5 million, in some, Rs. 1.5 million,” said Raheem Siddiqui, an analyst and a tax lawyer. “So I would recommend a daily commute between Islamabad and Lahore if we’re being honest. I’m not as optimistic as my other co-panellist friends, some of whom suggest that even a rush-hour Rawalpindi-Islamabad commute would do the trick. Laughable. If Islamabad residents can’t manage Lahore, they could try Peshawar.”

“CapEx is just too much with this, regardless of how little the running expenses are; there’s just no way to sugarcoat this,” said Fizza Haider, a finance lecturer

at a local business school. “There are some problems you cannot work around, you have to work through them. So just roll up your sleeves and get ready for that daily commute. Buy a house in Sheikh Maltoon Housing Society in Mardan, which would be cheaper than anything you would be able to get in Peshawar.”

The conference panellists broke for a lunch break when a member from a delegation of engineering students visiting from UET Taxila pointed out that by the time these long commutes would have recouped the initial capital investment, it would be time to replace the battery again, necessitating another expensive purchase.