Pak Elektron Limited (PSX: PAEL) reported a massive 63% surge in net profit, reaching Rs3.85 billion for the year ended December 31, 2025, compared to Rs2.37 billion in the previous year. The exceptional performance was driven by strong revenue growth and a significant reduction in finance costs.
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The company’s basic earnings per share (EPS) grew robustly to Rs4.24, up from Rs2.72 in the corresponding period last year, delivering enhanced returns to shareholders.
Revenue Growth and Gross Profit
PAEL’s net revenue grew by an impressive 20% year-on-year to Rs63.52 billion from Rs53.11 billion. This top-line expansion reflects strong demand for the company’s products across its electrical and electronics segments.
The company maintained excellent control over direct expenses. Cost of sales increased by 19% to Rs46.38 billion, slightly slower than revenue growth. Consequently, gross profit jumped a solid 21% to Rs17.14 billion from Rs14.14 billion in the prior year, demonstrating improved profitability at the gross margin level.
Operating Performance
On the operating side, the company faced inflationary and expansion pressures typical of a growing business. Key operating expenses showed increases:
- Selling and distribution expenses: Spiked 43% to Rs4.44 billion, reflecting investment in market expansion
- Administrative expenses: Rose 16% to Rs3.01 billion
- Other expenses: Increased 35% to Rs546 million
- Impairment allowance: More than doubled to Rs622 million
However, an infusion of other income, which grew 55% to Rs120.12 million, along with the sheer strength of the gross profit, allowed operating profit to increase by 11% to Rs8.64 billion.
Finance Costs: The Game-Changer
The absolute game-changer for PAEL’s bottom line was located below the operating line. The company slashed its finance costs by a massive 30%, dropping to Rs2.58 billion from the heavy Rs3.68 billion burden recorded last year.
This substantial reduction in debt-servicing costs reflects improved liability management, potentially including debt repayment, refinancing at better rates, or reduced borrowing requirements due to stronger cash flows.
Bottom Line Impact
Boosted by these savings and a minor profit from an associate, profit before income taxes jumped 46% to Rs6.04 billion from Rs4.13 billion.
Even after accounting for a 24% higher income tax provision of Rs2.19 billion (reflecting the higher profitability), the significantly lower debt-servicing costs combined with top-line growth allowed the company to comfortably secure its impressive 63% growth in final net profit.
Financial Summary
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Net Revenue | Rs63.52bn | Rs53.11bn | +20% |
| Gross Profit | Rs17.14bn | Rs14.14bn | +21% |
| Operating Profit | Rs8.64bn | Rs7.81bn | +11% |
| Finance Cost | Rs2.58bn | Rs3.68bn | -30% |
| Profit Before Tax | Rs6.04bn | Rs4.13bn | +46% |
| Net Profit | Rs3.85bn | Rs2.37bn | +63% |
| EPS | Rs4.24 | Rs2.72 | +56% |
About Pak Elektron Limited
Pak Elektron Limited (PSX: PAEL) is one of Pakistan’s leading manufacturers of electrical and electronics products. The company operates through two main divisions: appliances (refrigerators, air conditioners, microwave ovens, etc.) and power (transformers, switchgear, etc.), serving consumers and industrial customers across Pakistan.
