Pakistan’s Blue-Chip Companies Earn Massive Rs609 Billion Profit in 4QFY26

KARACHI: Pakistan's blue-chip companies earned Rs609 billion in the April–June quarter, 34 percent more than a year earlier, according to Topline Securities. KSE-100 profits recorded one of their strongest quarterly jumps, but the headline number hides an unusually concentrated surge. Look under the hood, and one sector accounts for most of the increase.

Oil and gas explorers earned Rs214.2 billion in the quarter, 2.6 times their profit a year earlier. Topline linked the jump mainly to a large tax reversal following the Federal Constitutional Court's super-tax ruling. While the court upheld the levy generally, it protected E&P companies from taxation beyond the limits set under the Fifth Schedule and their petroleum concession agreements.

Strip the explorers out, and the picture changes sharply. Focus Pakistan's calculations from Topline's figures show the rest of the index grew earnings by roughly 6 percent year-on-year. The E&P sector alone delivered about 85 percent of the quarter's Rs155 billion profit increase.

That gap matters for investors who drove the KSE-100 up 44 percent in FY26. Full-year earnings for index companies rose a more modest 18 percent to Rs2.01 trillion.

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Banks, one of the market's heavyweight sectors, barely moved. Lenders earned Rs165.7 billion in the fourth quarter, up 3 percent year-on-year but down 2 percent from the previous quarter as non-interest expenses climbed and net interest income slipped. Their full-year profit grew 4 percent to Rs648.6 billion.

Several industrial sectors told a healthier story. Cement makers lifted quarterly profit 27 percent to Rs54.3 billion. Domestic dispatches rose 10 percent over the year and pushed full-year sector earnings to Rs182.8 billion. Automakers grew quarterly earnings 42 percent to Rs31.4 billion on stronger sales and improved auto financing. Fertiliser producers posted a 35 percent jump to Rs49.5 billion, although one-off SIDC-related discounting income inflated their sequential gain.

Textile earnings jumped 132 percent. Chemicals rose 108 percent and power 39 percent.

Not every sector escaped the turbulence. The Middle East conflict squeezed food and personal care margins, and the sector's quarterly profit of Rs15.8 billion came in 13 percent below the previous quarter. Refiners earned Rs1.1 billion, more than double a year earlier but 96 percent below the January–March quarter after inventory losses and one-off adjustments. Pakistan State Oil's inventory losses dragged oil marketing companies to a Rs21 billion loss.

Pharmaceutical earnings slipped 10 percent to Rs5.3 billion as volumes fell and Searle booked a one-off adjustment.

Then came the cheques. Index companies declared Rs291.1 billion in cash dividends during the quarter, just 3 percent more than a year earlier. The payout ratio fell to 48 percent from 62 percent. Profits rose by a third, but dividends barely moved.

Banks paid the most at Rs92 billion. United Bank led with Rs20 billion, ahead of Meezan Bank at Rs14.4 billion and Standard Chartered at Rs11.6 billion. Explorers followed with Rs85 billion, and OGDC alone distributed Rs25.8 billion. Mari Petroleum declared Rs22.4 billion, Pakistan Oilfields Rs20.6 billion and Pakistan Petroleum Rs16.3 billion. Fauji Fertilizer announced Rs20.6 billion, Nestlé Pakistan Rs9.6 billion and Lucky Cement Rs7.3 billion.

Full-year dividends reached Rs904.4 billion, up 11 percent, at a payout ratio near 45 percent.

Topline's analysis covers 88 of the 100 index companies, representing about 96 percent of market capitalisation. The brokerage expects the remaining results to leave the trend intact.

The real test now begins: whether broader corporate earnings can sustain their momentum when that tax-driven boost disappears.