Strong Four-Wheeler Sales Drive Landmark Performance as Net Earnings Reach Rs23.6 Billion
KARACHI — Sazgar Engineering Works Limited (SAZEW) has delivered its highest-ever annual and quarterly profit after tax for the 2025–26 financial year (FY26), according to a performance review by brokerage house Arif Habib Limited.
The Pakistani automotive manufacturer recorded full-year earnings per share (EPS) of Rs390.51 and declared a total cash dividend of Rs70 per share for the year.
Exceptional Fourth-Quarter Performance
During the final quarter of the financial year (4QFY26), SAZEW achieved a net profit after tax of Rs8.73 billion, translating into an EPS of Rs144.36. This marks a 151 per cent surge compared to the same period in the previous year and a 36 per cent rise quarter-on-quarter.
On a cumulative basis, total net earnings for FY26 reached Rs23.61 billion—a 44 per cent increase year-on-year—representing the highest annual net profit in the company’s operational history.
Alongside the financial results, the board declared a final quarterly cash dividend of Rs20 per share, bringing the cumulative cash distribution to Rs70 per share for FY26.
Four-Wheeler Deliveries Power Revenue Growth
Top-line revenue for the full year climbed 76 per cent year-on-year to Rs191.72 billion. The growth was primarily propelled by strong demand in the four-wheeler segment, where sales volumes rose 77 per cent to 19,179 units.
Quarterly revenue for 4QFY26 surged 181 per cent year-on-year and 62 per cent sequentially to Rs76.51 billion. Four-wheeler sales volumes for the quarter expanded to 6,549 units—more than double the volume recorded in 4QFY25—which included approximately 1,370 units of the Tank vehicle lineup.
Product Mix Shift Weighs on Gross Margins
Despite robust sales growth, gross profit margins experienced a slight contraction. The full-year gross margin dropped to 24.2 per cent in FY26, down from 29.1 per cent in FY25. For the fourth quarter, gross margins stood at 22.3 per cent compared to 25.1 per cent in the corresponding period last year.
Arif Habib Limited attributed the margin compression largely to a shift in the overall product mix and the cost pressures resulting from local currency depreciation.
Distribution expenses for the full year climbed 78 per cent year-on-year to Rs6.19 billion. In 4QFY26 alone, distribution costs jumped 124 per cent year-on-year, driven mainly by logisitics and initial delivery overheads following the market launch of the Tank-500 model.
Balance Sheet Highlights and Market Outlook
•Other Income: Totalled Rs2.65 billion for FY26 (up 96 per cent year-on-year), supported by higher returns on bank deposits. Fourth-quarter other income rose 108 per cent year-on-year to Rs667 million.
•Finance Costs: Full-year finance costs increased 97 per cent year-on-year to Rs454 million, reflecting higher long-term debt financing. Quarterly finance charges stood at Rs153 million.
•Effective Tax Rate: Remained stable at 38.7 per cent in 4QFY26, compared with 38.9 per cent in 4QFY25.
Maintaining a optimistic outlook on the automaker, Arif Habib Limited reaffirmed its “BUY” rating for SAZEW stock, setting a December 2026 target price of Rs2,650 per share. The brokerage noted that the equity is currently trading at attractive price-to-earnings ratios of 6.7 times for FY27 and 5.3 times for FY28.