Sazgar Engineering Works Posts Record Rs. 16.3 Billion Profit in FY25

Sazgar Engineering Works Limited (SAZEW) has reported the highest-ever net profit in its history, reaching Rs. 16.3 billion for the financial year 2024-25 (FY25), a massive 106% year-on-year growth compared to Rs. 7.9 billion in FY24. Earnings per share (EPS) nearly doubled, rising to Rs. 270.22 from Rs. 131.12.

Strong Revenue Growth Driven by Haval & Three-Wheelers

The company’s net revenue surged to Rs. 108.7 billion in FY25, reflecting an 89% increase YoY. This was largely fueled by:

• A 102% jump in Haval SUV sales, totaling 10,832 units.
• A 2.8x rise in three-wheeler sales, reaching 26,264 units.

Gross profit more than doubled to Rs. 31.6 billion, while operating profit before tax surged to Rs. 26.7 billion, up 122% YoY. Sazgar’s return on equity climbed to 122%, compared to 97% last year.

Quarterly Performance Declines

Despite the strong annual results, 4QFY25 earnings dropped 44% QoQ to Rs. 3.55 billion (EPS Rs. 57.58), as gross margins slipped to 25.1% from 32.6% in 3QFY25. Analysts attributed the decline to a sales mix shift toward lower-priced variants.

Quarterly revenue rose 18% YoY to Rs. 27.3 billion, with:

• 2,817 Haval units sold (+28% YoY).
• 6,258 three-wheeler units sold (+25% YoY).

Other income also fell 33% YoY to Rs. 320 million, due to lower interest rates.

Dividend & Future Outlook

Sazgar announced a final cash dividend of Rs. 52 per share for FY25, more than double last year’s Rs. 24 per share. This takes the full-year payout ratio to 19%.

The company also revealed plans to discontinue its Home Appliances business from September 1, 2025, in order to focus on its core automotive and mobility segments. Management confirmed the move will not impact sales or profitability.

Market Valuation

Currently, SAZEW is trading at a forward P/E ratio of 5.4x for FY26/27, signaling attractive valuations for investors amid its strong growth trajectory.

Sazgar Engineering Works’ record-breaking performance in FY25 highlights its growing dominance in the Pakistani auto sector, particularly through its successful Haval lineup and strong three-wheeler sales. With robust profitability, higher dividends, and a sharper focus on core businesses, the company is well-positioned for sustained growth in the coming years.

Afsheen Gohar

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