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Brent Nears $100 After Iran and Houthi Attacks
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Brent Nears $100 After Iran and Houthi Attacks

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Brent Nears $100 After Iran and Houthi Attacks Oil Prices Rise for Fourth Straight Session Oil prices climbed for a fourth consecutive session on Wednesday as renewed attacks across the Gulf heightened concerns over potential disruptions to global energy supplies. Brent crude futures rose 1.4% to $99.33 a barrel in early trading, moving closer to the key $100 psychological threshold. US West Texas Intermediate (WTI) also gained 1.4% to $94.34 a barrel. Oil prices have risen by roughly a quarter since early August as hopes for a lasting ceasefire have weakened and the six-month-old conflict has once again expanded across the region. Iran Attacks Disrupt Fujairah Oil Loadings Iran renewed attacks on the United Arab Emirates, disrupting oil loadings at Fujairah following a third strike in four days. Fujairah is a major regional storage and bunkering hub located outside the Strait of Hormuz. Any sustained disruption at the port could quickly intensify concerns about the availability of crude and refined products in international markets. Traders are closely monitoring whether loading restrictions continue and whether additional tankers remain off the water. Houthi Strikes Add to Saudi Energy Risks The latest escalation has also increased pressure on Saudi Arabia after Iranian-backed Houthis in Yemen struck several Saudi cities, potentially drawing the key US ally deeper into the conflict. US forces have reportedly targeted multiple Iranian oil tankers, while Iran has targeted a US base in Jordan. The widening confrontation has raised fears that additional energy infrastructure and shipping routes could become exposed. Saudi Arabia has already diverted some exports away from the Strait of Hormuz, providing an alternative route for part of its shipments. However, sustained attacks on Saudi energy facilities could make that workaround increasingly difficult to maintain. Oil Market Risk Premium Continues to Build Analysts at ING said the latest developments suggest peace talks remain distant, meaning markets are likely to continue pricing a substantial geopolitical risk premium into crude. OCBC analysts similarly warned that attacks on Saudi energy infrastructure and the disruption or loss of Iranian tankers could increase the possibility of another prolonged supply shock. Shipping lanes and regional energy plants were already under pressure before this week’s escalation. Further disruptions could therefore have a wider impact on supply expectations and transportation costs. Brent’s $100 Threshold Comes Into Focus With Brent approaching $100 a barrel, traders are now watching whether prices can break above the psychological level. A sustained move above $100 could signal that markets are assigning a significantly higher probability to prolonged supply disruptions. Some financial institutions have already warned that crude could spike further if attacks on shipping intensify. For now, the market reaction remains heavily driven by geopolitical risk. Each new strike is effectively adding another layer of uncertainty and insurance premium to global oil prices.

Atlas Battery Slips Into Loss as Chinese Lithium Imports and Price War Squeeze AGS Brand
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Atlas Battery Slips Into Loss as Chinese Lithium Imports and Price War Squeeze AGS Brand

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Atlas Battery slips into loss as Chinese lithium and a price war squeeze AGS Atlas Battery Turns 60 With a Difficult FY26 Atlas Battery Limited reaches its 60th year at a difficult point in its history. Instead of celebrating a stronger bottom line, Pakistan’s well-known AGS battery brand ended FY26 with a loss as competition intensified and cheaper alternatives reshaped the market. The company recorded battery sales of Rs34.9 billion during FY26, slightly below Rs35.2 billion a year earlier. The bigger pressure came from pricing rather than volumes. Gross margin fell from 11.3 percent to 8.5 percent, while the company posted a net loss of Rs371 million after tax compared with a profit of Rs91 million in the previous year. Loss per share stood at Rs10.59. Atlas Battery’s share price, which reached Rs319 in July 2025, ended the financial year near Rs219. Growing Auto Market Fails to Lift Margins Pakistan’s automotive market provided a stronger demand environment during FY26. Local car sales increased by around 39 percent, while motorcycle and three-wheeler sales climbed nearly 30 percent as vehicle assembly recovered. For Atlas Battery, however, stronger original equipment manufacturer (OEM) demand was only part of the story. The replacement market remained cautious as consumers faced tight household budgets. Buyers increasingly preferred smaller, cheaper and maintenance-free batteries, putting additional pressure on established manufacturers. At the same time, competitors adopted aggressive discounting strategies and widened price gaps. Excess industry capacity further strengthened customers’ bargaining power. The organised battery sector still accounts for roughly 70 percent of the domestic market, with the remainder made up of unorganised trade and imports. Atlas says it avoided chasing unsustainable volumes. While that may protect long-term positioning, the strategy came at a significant short-term cost. Chinese Lithium Batteries Create a New Threat The most important competitive challenge is no longer limited to other lead-acid battery manufacturers. Competitively priced Chinese lithium batteries are increasingly being used as alternatives to conventional heavy-duty lead-acid batteries, particularly in UPS, solar-storage and certain automotive applications. The shift is particularly significant because Pakistan’s rapid adoption of solar power should theoretically create stronger demand for battery storage. Instead, it has also created a new market for lower-cost lithium products. Atlas identifies lithium and other emerging battery chemistries as a medium- to long-term transition risk. If the company does not adapt, demand for traditional SLI lead-acid batteries could gradually decline. The competitive pressure is also affecting consumer perceptions. Imported and locally available alternatives are increasingly seen by buyers as comparable in quality, reducing the premium historically associated with established brands. Japanese Partnership Faces a New Market Reality Atlas Battery continues to benefit from its long-standing technical relationship with GS Yuasa of Japan. GS Yuasa remains a 15 percent shareholder, while Shirazi Investments holds 58.86 percent of Atlas Battery. However, strong ownership and technical credentials are becoming less effective as differentiators when consumers increasingly focus on price. The challenge for AGS is therefore not simply maintaining product quality. It is convincing customers that the additional value of an established brand justifies a premium over cheaper alternatives. Rising Costs Crush Gross Profit Atlas Battery’s cost pressures intensified during FY26. Cost of sales increased 2.3 percent to Rs32.0 billion, consuming 91.5 percent of revenue compared with 88.7 percent a year earlier. Geopolitical disruptions during the final quarter contributed to higher raw-material costs. Around 47 percent of Atlas’s lead requirements are sourced internationally, exposing the company directly to global lead prices and exchange-rate movements. The company estimates that a 5 percent movement in the US dollar can significantly affect lead costs. As costs increased while pricing remained under pressure, gross profit fell 25 percent to Rs2.96 billion. Operating profit was almost halved to Rs994 million. Lower Interest Rates Provide Limited Relief There was some relief on the financing side. Atlas Battery’s finance cost declined to Rs919 million as interest rates eased and working-capital management improved. However, the reduction was insufficient to offset the deterioration in operating profitability. Profit before tax stood at only Rs75 million. Tax expenses of Rs445 million, largely reflecting minimum-tax requirements, ultimately pushed the company into a statutory net loss. The situation also highlights the competitive disadvantage faced by documented manufacturers that remain within the formal tax system while competing against informal trade and grey-market imports. Exports Offer a Small Bright Spot Exports were among the few positive developments during the year. Atlas Battery’s export shipments increased 18.2 percent to Rs721 million, equivalent to approximately $2.57 million. Afghanistan and Yemen remained the primary destinations. However, external disruptions quickly complicated the export picture. The suspension of Afghan trade affected shipments, while conflict in the Middle East reduced the availability of vessels capable of carrying dangerous goods and increased freight costs. Atlas continued exporting despite these challenges, but international sales remained too small to compensate for broader domestic pressures. Management Bets on Brand Over Price Management’s response remains centred on product quality, customer service and the company’s established “Atlas Way” rather than entering an aggressive race to the bottom. The company introduced new sealed maintenance-free batteries featuring double-lid designs. Motorcycle batteries also benefited from stronger OEM production and continued to support margins. Atlas is simultaneously investing in operational efficiency. Solar capacity at its Karachi plant increased from 510 kW to 610 kW, while water-recycling initiatives saved around 37.5 million US gallons. The company also continued dealer development and training across its network of 275 outlets. Competitive Pressure Remains Intense Despite these initiatives, Atlas Battery’s own assessment points to a challenging competitive environment. Customers have considerable bargaining power, substitutes represent an increasing threat, lead suppliers remain relatively concentrated and competition across the industry is intense. Chinese manufacturers could potentially establish local production capacity under CPEC or as trade policies evolve, increasing competitive pressure further. At the same time, the solar-storage market is expanding, creating an attractive opportunity but also encouraging more low-cost suppliers to enter the segment. Taxes Add to the Cost Burden Atlas Battery contributed Rs8.2 billion to the national exchequer during FY26, equivalent to around 24 percent

National Refinery Limited says petroleum levy killed 95 RON just as Pakistan needed cleaner petrol ## 95 RON Petrol Was Taxed Out of the Market National Refinery Limited spent a year developing and producing higher-octane petrol. But according to its FY2026 annual report, a steep petroleum levy eventually “effectively eliminated” sales of its 95 RON Mogas. The company had introduced the premium grade to meet demand for cleaner, higher-octane fuel while improving refining margins beyond ordinary Mogas. NRL’s Directors’ Report says the government subsequently imposed an “exorbitantly high” petroleum levy on the product. The result, according to the refinery, was not weak consumer demand but a price structure that made the premium grade commercially unviable. The development comes as Pakistan continues to rely heavily on petroleum levies for fiscal revenue. The government collected more than Rs1.56 trillion in petroleum levy during FY26. ## Record Gasoline Output Failed to Translate Into a Premium-Fuel Success NRL nevertheless recorded its highest-ever motor gasoline production, at around 282,840 metric tons. However, the increase did not translate into the premium-fuel growth story the refinery had initially expected. Instead, cheaper grades filled the gap created by the policy environment surrounding 95 RON petrol. The episode highlights a broader challenge for Pakistan’s refining sector: companies are being encouraged to produce cleaner, higher-value fuels while simultaneously facing taxes and levies that can undermine their commercial viability. ## Hormuz Crisis Transformed the Refining Year NRL’s FY26 performance was heavily influenced by geopolitical disruption. Until February, refining margins remained weak and smuggled fuel continued to put pressure on domestic demand. The situation changed dramatically when the US-Iran conflict disrupted shipping through the Strait of Hormuz, a critical global oil transit route. The disruption created significant challenges for NRL. One of the company’s crude cargoes remained stranded for almost a month, while crude prices reached as high as $167 per barrel in a single day. Freight and war-risk premiums reportedly increased around tenfold. Lighter Aramco grades became unavailable, leaving heavier crude from Yanbu as one of the key available feedstocks. ## Heavier Crude Created a Diesel Yield Problem The shift toward heavier crude had consequences for product yields. Diesel cracks were among the few positive elements in the refining market, yet heavier crude reduced the refinery’s ability to maximise diesel output. NRL responded by purchasing locally produced crude that had been destined for export, securing ADNOC spot cargoes and rerouting shipments through the Red Sea. These measures helped keep the refinery operating despite the disruption. Throughput increased to around 70 percent from 56 percent a year earlier. HSD sales climbed 26 percent, while gasoline sales increased 34 percent. ## War Boosted Margins but Left a Costly Inventory Bill The geopolitical shock did not translate into a straightforward improvement in annual profitability. After the ceasefire, petroleum prices declined sharply. NRL was left holding high-cost inventory, resulting in an estimated year-end net realisable value loss of around Rs7 billion. The sequence illustrates the volatility of refining during a geopolitical crisis: margins can rise sharply during supply disruptions, but falling prices can quickly turn those gains into inventory losses. ## Profit Rebounds but Dividend Remains Absent NRL reported a net profit after tax of Rs6.16 billion for FY26, compared with a loss of Rs14.87 billion a year earlier. Earnings per share also turned positive, rising to Rs77.09 from a loss per share of Rs185.91. Despite the turnaround, the Board did not recommend a dividend, with capital requirements for refinery upgrades taking priority. The profit recovery therefore comes with significant caveats, particularly when the company’s policy-related costs and other charges are taken into account. ## Rs1.82bn Payment to PSO Adds to Policy Pressure In April 2026, the government required refineries to transfer part of their HSD-era gains. NRL’s share amounted to Rs1.82 billion, which was paid to Pakistan State Oil and deducted from revenue. The refinery also faced repeated changes to diesel pricing mechanisms. Pricing moved through several structures, including weekly adjustments, crude-linked pricing and eventually daily revisions after the financial year ended. The shifting framework has added uncertainty to refinery earnings and investment planning. ## Brownfield Policy Creates Another Financial Burden NRL also booked around Rs8.2 billion through June 2026 in connection with deemed duty under the Brownfield Refining Policy. The company says it completed the relevant signing formalities in March 2024 and had already invested in Euro-V HSD production as far back as 2017. NRL is contesting the charge, but the accounts still reflect the financial impact. The dispute comes at a time when refineries are under pressure to commit billions of dollars to modernisation and cleaner fuel production. ## Tax Changes Further Reduced Cash Flow The refinery also faced the impact of changes to Pakistan’s tax regime. Crude customs duty linked to deregulated products, amounting to around Rs6.7 billion through June 2025, was written off. NRL estimates the cumulative impact of related charges at approximately Rs13.5 billion. The Finance Act 2024 also classified motor spirit, HSD, kerosene and LDO as exempt supplies. NRL says this eliminated around 70 percent of its input sales tax claims. Super tax, turnover tax, alternate corporate tax and changes to the treatment of export income further increased the tax burden. Chairman Shuaib A. Malik said in his review that profit would have been “significantly higher” without these charges. ## Furnace Oil Market Collapses The refinery’s furnace oil business faced an even more dramatic decline. Local furnace oil sales plunged around 95 percent following the petroleum levy introduced through the Finance Act 2025, falling from 93,792 tons to just 5,065 tons. NRL responded by exporting 280,726 tons of furnace oil, compared with 180,726 tons previously. However, export realisations remained below crude costs as well as the previous local market price, limiting the financial benefit of shifting volumes overseas. ## Smuggling and Imports Continue to Weigh on Demand NRL also identified fuel smuggling and excessive imports as persistent threats to domestic demand. These pressures forced the refinery to manage throughput carefully even after market conditions improved. The weakening rupee added another layer of pressure by increasing the cost of crude payments and creating foreign exchange losses. Utility expenses, freight costs and letters-of-credit charges also continued to consume working capital. ## EVs Add to the Long-Term Refining Challenge Beyond immediate market and policy pressures, NRL sees structural changes emerging in the petroleum market. The growing adoption of electric vehicles could gradually reduce demand for conventional fuels. At the same time, global markets are moving away from furnace oil, creating another challenge for refineries with older configurations. NRL’s credit profile also carries some uncertainty. PACRA maintained the company’s AA/A1 ratings but assigned a “developing” outlook and kept the refinery under watch. ## NRL Plans Further Investment and Upgrades The company is looking at several operational initiatives to strengthen its position. NRL has highlighted plans involving lighter crude processing, higher HSD and Mogas production, wax sales, the turnaround of its Lube-I unit and repairs to its BTX facility. A Wood study is also being undertaken to assess potential refinery upgrades. These measures represent the operational response to a rapidly changing refining environment. But the company’s report suggests that investment decisions will remain closely tied to government taxation, pricing rules and the economics of upgraded products. ## The Bigger Policy Question NRL’s FY26 results tell a complicated story. The refinery returned to profitability, increased throughput and kept its supply chain functioning during a period of severe geopolitical disruption. Yet at the same time, policy charges, taxation changes, the collapse of furnace oil demand and fuel smuggling continued to weigh on its underlying economics. The 95 RON episode is perhaps the clearest example. Pakistan needs cleaner, higher-quality fuels and wants its refineries to invest billions of dollars in modernisation. But if the fiscal framework makes premium products commercially unattractive, the incentive to invest becomes weaker. NRL’s own theme for the year was “Beyond the Barrel.” Its annual report suggests that moving beyond the barrel will require more than new technology and capital. It will also require a policy framework that allows cleaner and higher-value refinery products to survive in the market. ### SEO Optimized Keywords National Refinery Limited, NRL FY2026 results, petroleum levy Pakistan, 95 RON petrol Pakistan, NRL 95 RON Mogas, Pakistan refinery sector, Brownfield Refinery Policy, Pakistan petroleum levy, Euro-V fuel Pakistan, NRL profit FY26, furnace oil Pakistan, refinery upgrades Pakistan, Pakistan refining industry, HSD deemed duty, NRL annual report 2026 ### Focus Keyphrase NRL 95 RON Petrol Petroleum Levy ### Meta Description NRL’s FY2026 report says a steep petroleum levy wiped out 95 RON Mogas sales, while policy charges, furnace oil losses and smuggling pressure the refinery’s recovery.
Pakistan

National Refinery Limited Says Petroleum Levy Killed 95 RON Just as Pakistan Needed Cleaner Petrol

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95 RON Petrol Was Taxed Out of the Market National Refinery Limited spent a year developing and producing higher-octane petrol. But according to its FY2026 annual report, a steep petroleum levy eventually “effectively eliminated” sales of its 95 RON Mogas. The company had introduced the premium grade to meet demand for cleaner, higher-octane fuel while improving refining margins beyond ordinary Mogas. NRL’s Directors’ Report says the government subsequently imposed an “exorbitantly high” petroleum levy on the product. The result, according to the refinery, was not weak consumer demand but a price structure that made the premium grade commercially unviable. The development comes as Pakistan continues to rely heavily on petroleum levies for fiscal revenue. The government collected more than Rs1.56 trillion in petroleum levy during FY26. Record Gasoline Output Failed to Translate Into a Premium-Fuel Success NRL nevertheless recorded its highest-ever motor gasoline production, at around 282,840 metric tons. However, the increase did not translate into the premium-fuel growth story the refinery had initially expected. Instead, cheaper grades filled the gap created by the policy environment surrounding 95 RON petrol. The episode highlights a broader challenge for Pakistan’s refining sector: companies are being encouraged to produce cleaner, higher-value fuels while simultaneously facing taxes and levies that can undermine their commercial viability. Hormuz Crisis Transformed the Refining Year NRL’s FY26 performance was heavily influenced by geopolitical disruption. Until February, refining margins remained weak and smuggled fuel continued to put pressure on domestic demand. The situation changed dramatically when the US-Iran conflict disrupted shipping through the Strait of Hormuz, a critical global oil transit route. The disruption created significant challenges for NRL. One of the company’s crude cargoes remained stranded for almost a month, while crude prices reached as high as $167 per barrel in a single day. Freight and war-risk premiums reportedly increased around tenfold. Lighter Aramco grades became unavailable, leaving heavier crude from Yanbu as one of the key available feedstocks. Heavier Crude Created a Diesel Yield Problem The shift toward heavier crude had consequences for product yields. Diesel cracks were among the few positive elements in the refining market, yet heavier crude reduced the refinery’s ability to maximise diesel output. NRL responded by purchasing locally produced crude that had been destined for export, securing ADNOC spot cargoes and rerouting shipments through the Red Sea. These measures helped keep the refinery operating despite the disruption. Throughput increased to around 70 percent from 56 percent a year earlier. HSD sales climbed 26 percent, while gasoline sales increased 34 percent. War Boosted Margins but Left a Costly Inventory Bill The geopolitical shock did not translate into a straightforward improvement in annual profitability. After the ceasefire, petroleum prices declined sharply. NRL was left holding high-cost inventory, resulting in an estimated year-end net realisable value loss of around Rs7 billion. The sequence illustrates the volatility of refining during a geopolitical crisis: margins can rise sharply during supply disruptions, but falling prices can quickly turn those gains into inventory losses. Profit Rebounds but Dividend Remains Absent NRL reported a net profit after tax of Rs6.16 billion for FY26, compared with a loss of Rs14.87 billion a year earlier. Earnings per share also turned positive, rising to Rs77.09 from a loss per share of Rs185.91. Despite the turnaround, the Board did not recommend a dividend, with capital requirements for refinery upgrades taking priority. The profit recovery therefore comes with significant caveats, particularly when the company’s policy-related costs and other charges are taken into account. Rs1.82bn Payment to PSO Adds to Policy Pressure In April 2026, the government required refineries to transfer part of their HSD-era gains. NRL’s share amounted to Rs1.82 billion, which was paid to Pakistan State Oil and deducted from revenue. The refinery also faced repeated changes to diesel pricing mechanisms. Pricing moved through several structures, including weekly adjustments, crude-linked pricing and eventually daily revisions after the financial year ended. The shifting framework has added uncertainty to refinery earnings and investment planning. Brownfield Policy Creates Another Financial Burden NRL also booked around Rs8.2 billion through June 2026 in connection with deemed duty under the Brownfield Refining Policy. The company says it completed the relevant signing formalities in March 2024 and had already invested in Euro-V HSD production as far back as 2017. NRL is contesting the charge, but the accounts still reflect the financial impact. The dispute comes at a time when refineries are under pressure to commit billions of dollars to modernisation and cleaner fuel production. Tax Changes Further Reduced Cash Flow The refinery also faced the impact of changes to Pakistan’s tax regime. Crude customs duty linked to deregulated products, amounting to around Rs6.7 billion through June 2025, was written off. NRL estimates the cumulative impact of related charges at approximately Rs13.5 billion. The Finance Act 2024 also classified motor spirit, HSD, kerosene and LDO as exempt supplies. NRL says this eliminated around 70 percent of its input sales tax claims. Super tax, turnover tax, alternate corporate tax and changes to the treatment of export income further increased the tax burden. Chairman Shuaib A. Malik said in his review that profit would have been “significantly higher” without these charges. Furnace Oil Market Collapses The refinery’s furnace oil business faced an even more dramatic decline. Local furnace oil sales plunged around 95 percent following the petroleum levy introduced through the Finance Act 2025, falling from 93,792 tons to just 5,065 tons. NRL responded by exporting 280,726 tons of furnace oil, compared with 180,726 tons previously. However, export realisations remained below crude costs as well as the previous local market price, limiting the financial benefit of shifting volumes overseas. Smuggling and Imports Continue to Weigh on Demand NRL also identified fuel smuggling and excessive imports as persistent threats to domestic demand. These pressures forced the refinery to manage throughput carefully even after market conditions improved. The weakening rupee added another layer of pressure by increasing the cost of crude payments and creating foreign exchange losses. Utility expenses, freight costs and letters-of-credit charges also

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NBP Islamic Gold Fund Books Rs21.5m Loss In First Weeks

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NBP Funds Report Mixed FY26 Performance NBP Fund Management Limited’s FY26 results, approved on September 4 and filed with the Pakistan Stock Exchange on September 7, show a sharply divided performance across its portfolio. While several equity and sector-focused funds benefited from the strong stock market rally, many money-market and government-securities schemes recorded substantial declines in income compared with the previous year. The newly launched NBP Islamic Gold Fund also ended its initial operating period in the red, highlighting the different investment outcomes across asset classes during FY26. Islamic Gold Fund Starts With Rs21.5m Loss The NBP Islamic Gold Fund, which operated for a limited period from May 4 to June 30, reported a net loss of Rs21.55 million. The loss was largely linked to a Rs23.92 million unrealised mark-to-market decline. Since the fund had only been operational for several weeks, its results represent an initial-period performance rather than a full-year comparison. The early loss comes despite the broader investment case for gold, making the result a notable development for a newly launched product built around bullion exposure. Income Funds See Sharp Decline Several income-oriented schemes that benefited from elevated interest rates during FY25 saw their earnings weaken as yields declined. The NBP Money Market Fund reported net income of Rs9.34 billion, down from Rs14.81 billion a year earlier. Similarly, the NBP Financial Sector Income Fund recorded Rs6.79 billion compared with Rs8.82 billion previously. The NBP Government Securities Liquid Fund’s income fell to Rs780 million from Rs1.82 billion, while the NBP Islamic Government Securities Fund-I saw its net income plunge to Rs151 million from Rs774 million. Other income-focused funds also recorded significant declines. NBP Islamic Savings Fund earned Rs990 million against Rs1.62 billion, while NBP Islamic Mahana Amdani Fund posted Rs1.09 billion compared with Rs2.01 billion a year earlier. The NBP Government Securities Savings Fund reported Rs389 million, down sharply from Rs1.25 billion. The overall trend points to weaker coupon and placement income as market yields eased, with the decline in earnings outpacing reductions in expenses. Equity Funds Benefit From Market Rally Equity-focused schemes delivered a much stronger performance during FY26. The NBP Stock Fund emerged as the standout performer, reporting net income of Rs17.61 billion compared with Rs14.05 billion in the previous year. Its performance was supported by Rs12.11 billion in unrealised gains and Rs4.65 billion in realised gains from sales, reflecting the strong performance of equity markets during the year. The NBP Islamic Stock Fund also improved, with net income rising to Rs3.08 billion from Rs2.48 billion. Meanwhile, NBP Islamic Energy Fund recorded Rs1.16 billion compared with Rs921 million, while NBP Financial Sector Fund jumped to Rs354 million from Rs110 million. NBP Pakistan Growth ETF nearly doubled its net income to Rs101 million from Rs56 million. Investment Gains Drove Equity Performance The stronger results from equity schemes were primarily driven by market appreciation rather than significant reductions in operating costs. In the case of the NBP Stock Fund, management fees continued to rise alongside the growth in assets, reaching Rs1.64 billion. This indicates that the improvement in fund earnings was largely supported by gains on investments, particularly unrealised equity appreciation. New Funds Show Limited-Period Results Several NBP schemes were launched or operated for only part of the financial year, making their reported figures difficult to compare directly with established full-year funds. The NBP Islamic Principal Protection Fund-I, launched through staggered plans, recorded combined net income of Rs106 million. One of its plans, NIPPP-III, reported a small operating loss of Rs0.50 million. The NBP Financial Sector Income Plus Fund, which was open from April 20, generated Rs843 million in just over two months, with almost all of the income coming from bank profit. The NBP Government Securities Fund-II’s NGSP-VIII plan reported Rs194 million for a partial-year period. Several Mustahkam and cash plans also reported period-specific figures, meaning their results should not be treated as directly comparable with funds that operated for the entire financial year. Filing Covers 31 Funds The covering letter submitted to the PSX lists 31 funds. The distribution column in the filing remains blank, with one line marked NIL. The printed accounts are expected to follow. As a result, investors will need to wait for the complete financial statements and any related distribution announcements before drawing conclusions about payouts and unit-holder returns. What FY26 Results Reveal The results reflect a major shift in the investment environment between FY25 and FY26. Higher policy rates had previously supported money-market and government-securities funds by generating strong returns from cash and fixed-income placements. As yields eased, those income streams came under pressure. At the same time, the stronger equity market provided a significant boost to stock and sector-focused funds. This divergence means headline fund income alone does not provide a complete picture of investor performance. Unit-holder returns, distributions and changes in net asset values will remain important measures when assessing the actual benefit to investors. Gold Fund Loss Highlights Early Market Risk The NBP Islamic Gold Fund’s Rs21.55 million loss is relatively modest in absolute rupee terms, but its timing makes it noteworthy. Because the fund operated for only a short period, the mark-to-market decline reflects the market conditions during its launch window rather than a full-year investment cycle. The result also underlines the fact that asset-backed investment products can experience short-term volatility even when their underlying long-term investment narrative remains attractive. Overall, NBP Fund Management’s FY26 results present an uneven picture: equity exposure benefited from market appreciation, while cash-heavy and fixed-income schemes faced pressure from lower yields.

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Govt To Penalise Refineries That Miss Oct 1 Upgrade Deal Deadline

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Government Tightens Brownfield Refinery Upgrade Rules The federal government will impose financial penalties on oil refineries that fail to sign Upgradation Agreements (UAs) with the Ministry of Energy’s Petroleum Division by October 1, 2026. The decision came as the Federal Cabinet ratified amendments to the Pakistan Oil Refining Policy for Upgradation of Existing Brownfield Refineries, 2023, incorporating directions issued by the Cabinet Committee on Energy (CCoE) on July 28, 2026. The revised framework is designed to accelerate refinery modernisation, increase production of Euro-V petrol and diesel, and reduce the output of furnace oil and other lower-value petroleum products. Signing Authority Shifted From OGRA to Petroleum Division Under the amended policy, refineries will now be required to sign their Upgradation Agreements directly with the Petroleum Division rather than the Oil and Gas Regulatory Authority (OGRA). The signing period has also been reduced from 60 days to 45 days. Policy implementation and monitoring responsibilities will similarly shift from OGRA to the Petroleum Division. Incremental incentives will be deposited into a Refinery Upgradation Account operated by the Petroleum Division instead of being maintained in escrow accounts with OGRA. Independent third-party consultants will be responsible for certifying progress on refinery upgrade projects. Plants that fall behind schedule or default on their commitments will not receive incentives until they address the relevant shortcomings. Government Uses HSD Duty as Compliance Incentive One of the strongest measures in the revised policy is linked to the deemed duty on high-speed diesel (HSD). Refineries that fail to sign their agreements by October 1, 2026, will be required to deposit the deemed duty above 5 percent on HSD into the Refinery Upgradation Account. The payment will be calculated from the later date of signing and must be completed by June 30, 2027. In contrast, refineries that sign their agreements by October 1 will see the deemed duty on HSD reduced to 2.5 percent. It will then fall to zero by November 15, 2026. The mechanism effectively gives refineries a financial incentive to complete the agreement process within the government’s revised deadline. Incentives Linked to Faster Project Completion The amended policy also introduces incentives for refineries that complete their projects ahead of schedule. If a refinery achieves commercial operation within three years, it can claim an additional incentive equivalent to 0.5 percent of the applicable capped limit for every year saved. The overall completion period has been set at five years, followed by a one-year cure period. However, using the cure period will result in a 1 percent reduction in the incentive. The government may allow another year beyond the cure period, but only where sufficient justification is provided. Licence Revocation Threat Added The revised policy also introduces a stronger regulatory consequence for prolonged delays. Refineries that fail to commission their upgraded units within the maximum 5+1-year outer limit could face revocation of their licences by the competent authority. The government has also stipulated that international arbitration will not be permitted without prior Cabinet approval. Officials said additional definitions would be incorporated into the policy to minimise ambiguity and ensure that all parties interpret its provisions consistently. Refinery Upgrades Could Save $1 Billion Annually The government expects the refinery modernisation programme to generate significant economic benefits. Upgraded plants are expected to increase domestic production of higher-value Euro-V fuels while reducing reliance on imported petroleum products. The government estimates that the upgrades could save around $1 billion annually in foreign exchange. The programme is also intended to attract fresh investment into Pakistan’s refining sector. The Cabinet was informed that Saudi Arabia has already expressed interest in the country’s refinery industry. Across the sector, the agreements are expected to unlock approximately $6 billion in investment. Five Operating Refineries Ready to Sign Agreements On August 26, 2026, Petroleum Minister Ali Pervaiz Malik met representatives of Pakistan’s five operating refineries — PARCO, PRL, NRL, Cnergyico and Attock Refinery. According to officials, all five refinery managements reiterated their readiness to sign agreements under the brownfield upgrade policy. The agreements were expected to be signed early next month. However, a senior executive from one refinery pointed out that the amended policy had not yet been formally notified. Once the revised policy is officially notified, refineries will have 45 days to sign their agreements with the Petroleum Division. Deadline Now Depends on Formal Notification The government is effectively using both the HSD duty mechanism and the potential loss of refinery licences to accelerate investment in cleaner and more efficient refining capacity. The success of the October 1 deadline will therefore depend not only on the readiness of the five operating refineries but also on how quickly the amended policy is formally notified. If implemented as planned, the revised framework could mark a major shift in Pakistan’s refinery modernisation drive, with cleaner fuels, higher-value production, lower import dependence and billions of dollars in potential investment at stake.

Export Tax and Regulatory Shifts Highlighted as Primary Risks to Lucky’s Profitability: Report
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Export Tax and Regulatory Shifts Highlighted as Primary Risks to Lucky’s Profitability: Report

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Strong FY26 Performance Despite Policy Uncertainty Lucky Cement Limited delivered a strong financial performance in FY26, but its annual report identifies unpredictable government policy as a strategic risk that could affect future profitability. The company considers the likelihood and potential impact of this risk to be low. However, it specifically highlights export-related taxation and regulatory changes as factors that could influence earnings and overseas market competitiveness. Lucky says it addresses these issues through the All Pakistan Cement Manufacturers Association (APCMA) and the Pakistan Business Council, while continuing to monitor regulatory developments. Group Revenue Rises to Rs645.9 Billion Lucky Cement’s group gross revenue increased 14.6 percent to Rs645.9 billion during FY26. Consolidated net profit reached Rs96.5 billion, while earnings per share rose 15.7 percent to Rs60.78. The standalone business performed even more strongly, with after-tax profit increasing 40.9 percent to Rs46.6 billion. Standalone profit before tax rose 28.7 percent to Rs60.9 billion. The results reflect a year of solid growth, even as the company faced changes in export markets and broader cost pressures. Domestic Cement Sales Outperform Industry Domestic cement volumes increased 10.1 percent to 6.5 million tons, exceeding the industry’s 9.3 percent growth. Lucky’s local market share edged up to 15.7 percent from 15.6 percent. Exports, however, moved in the opposite direction. Export volumes declined 8.2 percent to 3.1 million tons following the closure of the Afghan border and the company’s decision to prioritise margins over tonnage. Total company dispatches still increased 3.5 percent to 9.6 million tons, although Lucky’s overall industry share fell to 19.0 percent from 19.7 percent because of the lower export volumes. Margin Improvement Supports Profit Growth Lucky’s standalone gross margin improved to 37.5 percent from 34.3 percent a year earlier. Dividend income from subsidiaries and associates also increased to Rs15.8 billion from Rs12.7 billion. The improvement demonstrates that the company was able to protect profitability despite lower export volumes and a challenging operating environment. However, the annual report makes clear that future tax, duty and regulatory decisions could alter the economics of both domestic and export operations. Why Government Policy Remains a Risk Lucky’s formal risk assessment gives unpredictable government policy a low likelihood and low impact rating, but the underlying disclosure is more cautious. The company notes that unpredictable shifts in government policies can disrupt planning and operations. Its mitigation strategy includes advocacy through APCMA and the Pakistan Business Council, along with continuous monitoring of regulatory developments and competitor activity. The approach suggests that policy risk is considered manageable rather than irrelevant. Export Taxes Could Change Market Competitiveness The company’s SWOT analysis is more direct about the potential impact of trade policy. Changes in taxation, particularly export-related taxes and regulatory frameworks, could affect profitability and the attractiveness of overseas markets. Export competitiveness is also influenced by freight rates, energy costs and regional cement prices. Even a change in taxation on cement bags or clinker can alter the economics of an export route. FY26 provided a practical example of how external policy developments can affect the business. Industry exports declined 2.2 percent, while Lucky’s northern export flows were affected by the Afghan border closure. The company responded by reducing lower-margin cargo and shifting greater emphasis toward domestic sales. In other words, policy did not derail the business, but it changed the sales mix. Energy Costs and Industry Overcapacity Add Pressure Government policy is only one part of the risk picture. Lucky considers changes in the competitive environment a high-likelihood risk. If demand weakens while domestic and international supply remains elevated, cement prices, volumes and margins could come under pressure. Industry overcapacity remains a significant concern. Energy costs are another important variable. Coal prices, fuel levies, carbon-related regulations and logistics expenses can directly affect kiln economics and export competitiveness. Renewable Energy Helps Manage Costs Lucky has continued investing in infrastructure aimed at reducing its exposure to energy costs. The company has 103.1 MW of renewable energy capacity, meeting around 55 percent of its power requirements. Its initiatives also include waste-heat recovery systems, batteries and UC3 technology across all four Karachi production lines. A further 15 MW solar addition is planned. These investments are designed to improve efficiency and provide greater protection against volatility in conventional energy costs. Litigation Adds Another Layer of Risk Litigation is also identified as a high-likelihood risk, although the company rates its potential impact as medium. Taxation, contracts and regulatory matters can result in legal disputes, and the annual report includes disclosures relating to ongoing cases. This means regulatory risk can extend beyond changes to government rules. The interpretation and enforcement of those rules can also affect the company. Diversification Provides a Strategic Cushion Lucky Cement is continuing to expand and diversify its business while managing risks in the cement sector. In Iraq, its 0.65 million-ton grinding mill at Samawah commenced commercial operations. In the Democratic Republic of Congo, Nyumba Ya Akiba plans to increase integrated production capacity from 1.31 million tons to 2.91 million tons annually, with work scheduled to begin in the first quarter of FY27. National Resources now holds five leases in Balochistan, including copper-gold assets, with a maiden resource estimate expected as the next major step. Wider Group Businesses Continue to Grow Other businesses within the group also contributed to its broader growth strategy. Lucky Motor’s volumes increased 43 percent, while Lucky Core’s animal health and pharmaceutical businesses recorded growth. Lucky Electric is also progressing efforts to increase its use of Thar coal. This diversification gives the group additional sources of earnings beyond its core cement operations and provides some resilience against individual sector-specific shocks. Dividend and Financial Strength The board has recommended a final cash dividend of Rs5.00 per share. The company’s annual general meeting is scheduled for September 25, 2026. Lucky’s consolidated contribution to the national exchequer reached Rs175.7 billion, while foreign exchange generated by the group was reported at $133 million. Reserves increased 23.5 percent to Rs213.7 billion, and the company’s long-term credit rating remained at AA+. FY27 Outlook Depends on More Than Demand

Pipeline Limits, Plant Shutdowns Held Back MariEnergies’ Record Year
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Pipeline Limits, Plant Shutdowns Held Back MariEnergies’ Record Year

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Pipeline limits, plant shutdowns held back MariEnergies’ record year Record Production Capacity Meets System Constraints Mari Energies Limited says its fields had the capacity to deliver more gas and oil during FY2025-26, but pipeline constraints and unexpected plant shutdowns prevented additional volumes from reaching the market. Forced curtailment remained a recurring issue throughout the year. According to management, the shortfall between available capacity and actual production was not primarily a reservoir problem. Instead, limitations across the gas transmission and offtake system restricted the company’s ability to fully utilise its producing assets. Peak Production Highlights Untapped Capacity MariEnergies recorded average production of 113,090 barrels of oil equivalent per day (BOEPD) during the year. On June 29, however, the company’s assets reached a record single-day production level of 132,043 BOEPD. The gap between the daily peak and the annual average provides an important indication of the company’s available capacity. Management argues that the ability to reach more than 132,000 BOEPD demonstrates that the underlying fields and production infrastructure can support higher output when the system is able to absorb it. Mari sold 41.28 million barrels of oil equivalent during FY26, representing an increase of 5 percent. Gas sales reached 305 billion cubic feet, while liquids sales stood at 537,385 barrels. Despite these record or near-record volumes, the company says actual production remained below what its assets could have supplied because of curtailment. Customer Shutdowns Added to the Curtailment Problem Offtake constraints were not limited to pipelines. Fertilizer plants, power stations and other customers periodically reduced their gas nominations when their own facilities shut down unexpectedly or underwent operational interruptions. When a major customer goes offline, producers can be left with limited options for additional gas supply, particularly when storage and alternative evacuation routes are unavailable. Pipeline capacity provided another major constraint. A producer cannot increase deliveries if the downstream transmission network is operating at capacity, damaged or experiencing an imbalance. The result was a situation in which production capacity remained available while market demand and evacuation infrastructure were unable to consistently absorb it. Profit Rises Despite Operational Headwinds MariEnergies still delivered a strong financial performance in FY26. Net profit increased 34 percent to Rs87.1 billion from Rs65.1 billion, while net sales rose 8 percent to Rs191.7 billion. Earnings per share improved to Rs72.52 from Rs54.25, and return on equity increased to 29.31 percent from 26.23 percent. However, operating profit increased by only 1 percent to Rs82.6 billion from Rs81.4 billion. The numbers suggest that the company’s strong bottom-line performance was not simply the result of higher production volumes. Higher Costs and Curtailment Weigh on Operations A full-year royalty under Rule 35 of the onshore petroleum rules added approximately Rs8.5 billion to costs during the year. Curtailment also affected the utilisation of available capacity. Production assets that remained ready to operate could generate little or no additional revenue when pipelines or customers could not accept their output. Chairman Lt Gen Anwar Ali Hyder (retd) highlighted security concerns, circular debt, pipeline capacity, geopolitical developments and changing macroeconomic conditions as part of the broader operating environment. Managing Director Faheem Haider described the company as resilient during a difficult year while continuing to support national energy requirements. The situation highlights a recurring challenge in Pakistan’s gas sector: domestic producers can be encouraged to increase supply during shortages but subsequently face restrictions when demand falls, customers shut down or the transmission network becomes constrained. Security Risks Further Complicate Gas Evacuation Operational constraints were also linked to security conditions in Khyber Pakhtunkhwa and Balochistan, where Mari continues to develop frontier assets. The company said it maintained close coordination with law-enforcement agencies and local communities as employees and facilities operated in challenging areas. Security incidents also affected evacuation infrastructure. SNGPL line ruptures following security incidents disrupted routes through which gas could be transported. This means a producing field can remain technically healthy while still becoming commercially stranded if the pipeline network downstream is unavailable. Reserves Growth Supports Long-Term Production Despite the operational limitations, MariEnergies continued developing new production streams and expanding its resource base. Spinwam and Shams were brought into production during the year, adding further volumes to the national gas system. Development activity also continued at Mari, Sujawal, Shewa and other fields. The company’s 2P plus 2C reserves and resources increased to 1,029 million barrels of oil equivalent from 952 million. Its 2P reserves replacement ratio reached 375 percent, while reserves life increased to 21 years. These figures provide an important counterpoint to concerns about underutilised production capacity. If pipeline and offtake constraints ease, Mari appears to have a substantial resource base from which to increase future production. Dividend and Investment Plans The board has proposed a final cash dividend of Rs18.70 per share, equivalent to 187 percent. An interim dividend of Rs8.30 per share has already been paid, taking the total FY26 dividend to Rs27 per share compared with Rs21.70 in the previous year. The resulting payout ratio stands at 37 percent. Shareholders will vote on the proposed payout at the company’s 42nd annual general meeting, scheduled for September 25 at Serena Hotel, Islamabad. The share transfer books will remain closed from September 22 to September 25. Rs76bn Investment Supports Diversification MariEnergies spent Rs76 billion on investing activities during FY26, including expenditure related to mining and technology. The company also contributed approximately Rs129 billion to the national exchequer. Its importance to Pakistan’s fertilizer industry remains significant, with Mari supplying gas supporting more than 90 percent of the country’s urea production. Cabinet approval for the supply of Ghazij gas to the fertilizer sector, if fully implemented, could further reinforce Mari’s role in supporting food security. Minerals and Data Infrastructure Expand the Business MariEnergies is also pursuing diversification beyond its traditional oil and gas operations. The company is developing minerals-related opportunities in Chagai and has highlighted Karakoram-01, described as Pakistan’s first purpose-built, AI-ready data centre, as part of its technology expansion. At the same time, the company reported zero Tier-I process safety events during the year and maintained

Descon Oxychem Profit Plunges to Rs 303m as Sales, Margins Shrink
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Descon Oxychem Profit Plunges to Rs 303m as Sales, Margins Shrink

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Descon Oxychem Reports Sharp Decline in FY26 Profit Descon Oxychem Limited’s annual profit more than halved in the year ended June 30, 2026, as lower sales and compressed margins weighed heavily on its financial performance. On a standalone basis, net profit declined 62 percent to Rs303.3 million from Rs790.2 million a year earlier. Earnings per share (EPS) fell to Rs1.73 from Rs4.51. Net sales also decreased 16 percent to Rs4.99 billion from Rs5.92 billion. Gross Profit Nearly Halves The decline in sales was accompanied by significant pressure on profitability. Standalone gross profit fell almost half to Rs864.4 million from Rs1.70 billion in the previous year. Operating profit dropped to Rs370.7 million from Rs1.26 billion, reflecting the combined impact of weaker sales and tighter margins. The company also faced a sharp increase in financing expenses. Finance cost surged to Rs64.9 million from just Rs9.9 million a year earlier. Other income, however, increased to Rs136.6 million during the year. Consolidated Earnings Also Fall Sharply The group’s consolidated results were stronger than the parent-only figures but still showed a substantial decline. Consolidated sales stood at Rs5.11 billion, compared with Rs6.00 billion in FY25. Net profit attributable to shareholders fell to Rs393.6 million from Rs860.2 million a year earlier, while consolidated EPS declined to Rs2.25 from Rs4.91. The figures indicate that the decline in profitability extended across the group despite the consolidated business generating slightly higher earnings than the standalone company. Dividend Maintained Despite Lower Earnings Despite the steep fall in profit, the board recommended a final cash dividend of Rs2 per share, equivalent to 20 percent. Descon Oxychem had already paid an interim dividend of Rs2 per share for the half-year ended December 31, 2025. If approved, the final payout will take the full-year cash distribution to Rs4 per share, maintaining the same Rs2 interim and Rs2 final dividend pattern followed last year. No bonus shares or right shares have been recommended. Equity Declines as Dividends Exceed Profit The company’s weaker earnings were also reflected in its standalone balance sheet. Shareholders’ equity declined to Rs2.87 billion from Rs3.27 billion. During the year, Rs700 million of dividends were charged against profit of Rs303 million. This means the company distributed substantially more than the profit generated during FY26, contributing to the reduction in equity. Short-Term Borrowings Rise Sharply Descon Oxychem also recorded a significant increase in short-term borrowings under markup arrangements. These borrowings rose to around Rs705 million from Rs114 million a year earlier. Meanwhile, cash and bank balances fell to Rs100 million from Rs192 million. The combination of higher short-term borrowing and lower cash reserves points to greater pressure on the company’s working-capital position during the year. Annual General Meeting Scheduled for October 20 The company’s annual general meeting will be held on October 20, 2026, at 10am at Descon Headquarters, located at 18-km Ferozepur Road, Lahore. The share transfer books will remain closed from October 13 to October 20. Share transfers received by Corplink (Pvt) Limited, Lahore, by October 12 will be eligible for consideration for the proposed dividend. Profitability Remains the Key Challenge Descon Oxychem’s FY26 results highlight a difficult year, with declining sales, sharply lower gross and operating profits and a substantial rise in finance costs. While the company has maintained its dividend pattern, the payout comes against a much weaker earnings base and has contributed to pressure on shareholders’ equity. The key challenge going forward will be restoring sales growth and margins while managing borrowing costs and preserving sufficient liquidity.

Sazgar Flags Rival Models, Pricing, and After-Sales as Share Threat
Pakistan

Sazgar Flags Rival Models, Pricing, and After-Sales as Share Threat

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Record Year Puts Competition Under the Spotlight Sazgar Engineering Works Limited delivered a record performance in FY26, but its annual report places competitive pressure firmly among the company’s key risks. The company warned that new models, aggressive pricing and stronger after-sales offers from competitors could affect its revenue, profitability and market share. Emerging competitors have also been identified as a threat in Sazgar’s SWOT analysis. At the same time, the company acknowledged an internal weakness: it is not fully capitalising on available marketing opportunities. Sales Reach Record High While Margins Narrow Sazgar’s net sales increased 76 percent to Rs191.7 billion from Rs108.7 billion a year earlier. Profit after tax rose 45 percent to Rs23.6 billion from Rs16.3 billion. The revenue figure represents the strongest sales year in the company’s history. However, profit growth lagged behind the pace of sales expansion, with net margin declining to 12.3 percent from 15.0 percent. Four-wheelers remained the main contributor, generating Rs180.7 billion of total sales. During the year, Sazgar sold 19,179 four-wheelers, 26,845 three-wheelers and 42,980 tractor wheel rims. While three-wheelers and tractor rims remain important to the company’s broader business, the central competitive battle is increasingly focused on its GWM-linked SUV range. New Models and Pricing Could Reshape Market Share According to the directors’ report, competitors can put pressure on Sazgar through aggressive pricing, new product launches, warranty policies and stronger after-sales commitments. These factors are identified as principal risks alongside issues such as currency movements, CKD supplies and tax policy. Pakistan’s passenger-car and SUV market is becoming increasingly competitive, with existing assemblers and newer energy-focused brands adding models and expanding their market offers. For customers considering vehicles such as Haval or Tank, factors such as a longer warranty, better after-sales support or more attractive financing can influence the final purchase decision. Sazgar says it monitors competitors and intends to respond according to product and regional market conditions if demand or market share weakens. Marketing Remains an Internal Weakness Sazgar’s SWOT analysis offers an interesting assessment of its own position. The company identifies its brand, product quality, manufacturing capacity and people among its strengths. However, its stated weakness is the underutilisation of marketing opportunities. That admission stands out against a year of record sales. It suggests that while manufacturing capacity and product demand have expanded rapidly, Sazgar sees room to strengthen the marketing effort supporting its growing portfolio. The company also identifies several opportunities, including stronger brand management, new models with upgraded technology, expansion of its dealership network and localisation of imported parts. CKD Dependence Adds to Competitive Pressure Competitive pressure is not the company’s only concern. Sazgar continues to rely on imported CKD kits and critical components. Shipment delays, freight and insurance costs, exchange-rate movements and dependence on single-source suppliers can disrupt production or increase manufacturing costs. The company says it maintains additional inventory and works closely with vendors to reduce the impact of supply-chain disruptions. Currency movements add another layer of pressure. A weaker rupee can increase the cost of imported inputs and eventually push up vehicle prices, making competitor discounts more attractive to consumers. Policy and Economic Risks Remain Changes in auto policy, customs duties, sales tax, regulatory duties and safety requirements can also alter Sazgar’s cost structure. The company has identified inconsistent government policy as an ongoing threat. Consumer confidence, dealer offtake and production planning can also be influenced by political developments, law-and-order conditions, interest rates and inflation. Energy shortages and potential plant breakdowns remain additional operational uncertainties. These risks did not prevent Sazgar from achieving record results in FY26, but they underline how difficult it can be to protect market share once competition intensifies. Sazgar Expands Its New Energy Vehicle Portfolio Sazgar launched CKD versions of the Tank 500 hybrid and plug-in hybrid during FY26 and completed an expansion of its four-wheeler manufacturing plant. The company also points to the government’s growing emphasis on new energy vehicles as supportive of its strategy. At the same time, its sustainability discussion identifies a longer-term shift in consumer preferences as a potential risk, particularly as buyers gradually move away from conventional petrol and diesel vehicles. This means the competitive challenge is not limited to pricing and conventional SUVs. Powertrain technology could increasingly determine which brands gain market share in the years ahead. Strong Payout and Balance Sheet Growth Sazgar’s financial performance also translated into a substantial return for shareholders. The board recommended a final cash dividend of Rs20 per share, equivalent to 200 percent. The company had already paid interim dividends amounting to 500 percent during the year. This takes the total cash dividend for FY26 to 700 percent, compared with 520 percent in FY25. Despite the increase, the overall payout ratio remains relatively modest at around 18 percent of earnings. Equity increased 81 percent to Rs43.0 billion after accounting for profit and distributions, while total assets nearly doubled to Rs81.7 billion. The company has also notified its 35th annual general meeting, with the proposed final dividend subject to members’ approval. Exports Offer Another Growth Avenue Sazgar’s strategy for dealing with competitive pressure includes monitoring rival products, refreshing its vehicle portfolio, strengthening after-sales services, localising components and expanding exports. Three-wheeler exports remain relatively small compared with the company’s SUV business, but they are being positioned as one way to provide a degree of protection against rupee depreciation. The broader objective is to diversify growth beyond the domestic market while building greater resilience against currency and demand-related pressures. The Next Test Is Protecting Market Share Sazgar’s FY26 numbers remain strong, with record sales of Rs191.7 billion and profit after tax of Rs23.6 billion. But the company’s risk disclosures suggest that the next phase of growth may be more challenging. New models, sharper pricing, stronger warranties and increasingly competitive after-sales packages are likely to make the SUV market more demanding. Sazgar has the manufacturing capacity, growing product portfolio and financial strength to respond. The question is whether it can turn those advantages into sustained market share as competition becomes more aggressive. Its

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