Pakistan Synthetics Limited (PSX: PSYL) was incorporated in Pakistan as a private limited company in 1984 and was converted into a public limited company in 1987.
The company is engaged in the manufacturing and sale of plastic caps, crown caps, Preform, PET Resin and BOPET Resin.
Pattern of Shareholding
As of June 30, 2025, PSYL has a total of 138.699 million shares outstanding which are held by 1359 shareholders. Directors, CEO and their spouses have the majority stake of 65.93 percent in the company followed by individuals holding 33.72 percent shares.
The remaining ownership is distributed among other categories of shareholders.
Historical Performance (2019-25)
Barring year-on-year decline in 2020 and 2024, PSYL’s topline has ascended in all the years under consideration. The company posted net losses in 2019 and 2020. In 2021 AND 2022,PSYL’s bottomline significantly recovered followed by a contraction in 2023 and 2024. In 2025, the bottomline marginally picked up.
The company’s gross margin followed a downhill journey until 2020; conversely, its operating margin dwindled in 2019 and then rebounded in 2020. The net margin stayed in the negative zone in 2019 and 2020. In 2021, all the margins tremendously recovered only to tumble thereafter (see the graph of profitability ratios). The detailed performance review of the period under consideration is given below.
In 2019, PSYL’s net sales mounted by 33.74 percent year-on-year to clock in at Rs.7024.94 million. This was on account of an encouraging rise in the sales volume of Resin. Moreover, the company had instigated PET Preform manufacturing plant in May 2018 and started the commercial sale of its output in 2019.
The sales volume of plastic and crown caps slightly fell in 2019. Cost of sales hiked by 35.68 percent year-on-year in 2019 due to 32 percent drop in the value of Pak Rupee. Since PSYL imports nearly all of its raw materials, declining value of local currency drastically inflated the company’s cost of doing business.
Massive increase in gas prices also added to ado. Gross profit grew by 17.85 percent year-on-year in 2019, however GP margin slumped from 10.85 percent in 2018 to 9.56 percent in 2019. Operating expense escalated by 11 percent year-on-year in 2019 due to an increase in the payroll expense as the number of employees rose from 306 in 2018 to 325 in 2019.
Higher freight & handling charges, depreciation and provision for ECL also contributed towards higher operating expense in 2019. Other expense surged by an immense 102 percent in 2019 on account of exchange loss.
This pushed the operating profit down by 35.68 percent year-on-year in 2019 with OP margin dipping to 2.66 percent from OP margin of 5.53 percent recorded in 2018. Finance cost magnified by 60.22 percent year-on-year in 2019 on the back of higher discount rate and increased borrowings. As a consequence, PSYL’s posted net loss of Rs.123.90 million in 2019 as against net profit of Rs.116.96 million posted in 2018. The company recorded loss per share of Rs.2.18 in 2019 versus EPS of Rs.2.09 registered in 2018.
PSYL’s net sales slumped by 6.23 percent year-on-year to clock in at Rs.6587.16 million in 2020 owing to the outbreak of COVID-19 which considerably squeezed the demand. There was a decline in the sales volume of Resin, crown caps and plastic caps during the year. Conversely, the sales volume of Preform enhanced in 2020.
During 2020, the prices of PET Resin in the international market significantly fell, resulting in heavy inventory loss for the company. This also squeezed the gross margin of PSYL which clocked in at 7 percent in 2020. Operating expense spiked by 26 percent year-on-year in 2020 on account of a steep hike in freight and forwarding charges and elevated payroll expense as the number of employees rose to 335 in 2020.
Other expense fell by 98.44 percent year-on-year in 2020 due to lower exchange loss. Other income rose by 21.61 percent year-on-year in 2020 on account of gain on disposal of fixed assets. Operating profit multiplied by 55.22 percent in 2020 with OP margin picking up to 4.40 percent. Finance cost surged by 18.41 percent in 2020 due to higher discount rate for most part of the year. PSYL registered net loss of Rs.99.04 million in 2020, down 20 percent year-on-year. Loss per share was recorded at Rs.1.39 in 2020.
PSYL’s net sales rebounded by 10 percent to clock in at Rs.7250.59 million in 2021. While sales volume of Resin significantly fell in 2021, the off-take of Preform, plastic caps and crown caps buttressed PSYL’s topline. Cost of sales slid by 5.38 percent year-on-year in 2021 due to favorable movement of local currency and prices of imported raw materials.
Gross profit significantly rose by 215.62 percent in 2021 with GP margin jumping up to its optimum level of 20 percent. Operating expense registered 16.86 percent hike in 2021. Higher provisioning for WWF and WPPF drove other expense up by over 1316 percent in 2021. Higher other expense was, to a great extent, offset by 464.93 percent rise in other income on the back of exchange gain and net re-measurement gain on provision of GIDC.
In 2021, PSYL recorded 325.17 percent bigger operating profit compared to previous year with OP margin climbing up to 17 percent. Monetary easing contributed towards lessening the finance cost by 51.33 percent in 2021. The company posted net profit of Rs.748.37 million in 2021 with NP margin of 10.32 percent and EPS of Rs.8.09, the highest among all the years under consideration.
In 2022, PSYL boasted the highest topline growth of 69.80 percent. Net sales reached Rs.12,311.25 million in 2022. This was on account of upward price revisions and 25.5 percent growth in sales volume across categories. Radical depreciation of Pak Rupee, high energy prices as well as escalated commodity prices particularly feed stock squeezed the gross margin to 18.87 percent in 2021. In absolute terms, gross profit grew by 59.83 percent in 2022.
Operating expense mounted by 61.69 percent in 2022 on account of higher sales volume which drove the freight and forwarding charges up. High fuel prices and elevated payroll expense as the number of employees went up to 431 in 2022 from 369 in 2021 also had a say in driving up the operating expense in 2022. Hefty exchange loss and profit related provisioning inflated other expense by 246 percent in 2022. Operating profit marched up by 43.55 percent in 2022, however, OP margin slipped down to 14.38 percent.
Increased borrowings and monetary tightening measures undertaken by the central bank in 2022 translated into 31.13 percent higher finance cost in 2022. Nevertheless, net profit ascended by 31.78 percent in 2022 to clock in at Rs.986.21 million with NP margin of 8 percent. EPS dropped by 12.11 percent in 2022 to clock in at Rs.7.11 despite higher profitability. This was on account of issue of 1 bonus share for every 10 shares held which increased the number of outstanding shares from 84.06 million in 2021 to 92.47 million in 2022.
PSYL’s net sales went up by 17.17 percent year-on-year to clock in at Rs.14,425.23 million in 2023. However, it was mainly driven by increase in prices during the year. Cost of sales hiked by 18.62 percent in 2023 due to Pak Rupee depreciation and higher international commodity prices particularly fuel.
Gross profit enhanced by 10.95 percent in 2023; however GP margin inched down to 17.87 percent. 50 percent higher operating expense incurred in 2023 was the effect of higher fuel prices which drove up the freight and forwarding charges. Sales promotion, maintenance and warranties expense also hiked in 2023.
Higher exchange loss pushed other expense up by 33.83 percent year-on-year in 2023. Operating profit slumped by 0.84 percent year-on-year in 2023 with OP margin ticking down to 12.17 percent. Finance cost escalated by 53.48 percent year-on-year due to high discount rate and increased borrowings. Net profit slid by 19.12 percent year-on-year in 2023 to clock in at Rs.797.68 million with EPS of Rs.5.75 and NP margin of 5.53 percent.
In 2024, PSYL’s net sales eroded by 4.34 percent to clock in at Rs.13,799.51 million. This was on account of a decline in sales volume due to political and economic instability and decline in the purchasing power of consumers. High inflation and exorbitant energy and fuel prices didn’t allow cost of sales to drop by a comparable proportion. This resulted in 19.55 percent decline in gross profit in 2024 with GP margin falling down to 15 percent.
Operating expense nosedived by 11.46 percent in 2024 mainly on account of thinner outward freight & handling charges due to lower sales volume. Other expense declined by 87.39 percent in 2024 due to lower profit related provisioning, no allowance booked for ECL and no exchange loss incurred during the year due to stable local currency. Other income strengthened by 247.27 percent in 2024 mainly on account of reversal of provision of ECL.
Operating profit tumbled by 7.12 percent in 2024 with OP margin falling down to 11.81 percent Finance cost escalated by 121.43 percent in 2024 due to higher discount rate as well as increased short-term borrowings to meet working capital requirements. PSYL’s gearing ratio surged from 39 percent in 2023 to 52 percent in 2024. Share of loss on investment in associate company, Petpak films (Private) Limited was recorded at Rs.318.92 million in 2024 versus share of loss of Rs.1.64 million recorded in 2023. PSYL recorded net profit of Rs.347.765 million in 2024, down 56.40 percent year-on-year. This translated into EPS of Rs.2.51 and NP margin of 2.52 percent.
In 2025, PSYL’s net sales mounted by 22.27 percent to clock in at Rs.16,872.30 million. This came on the back of recovery in sales volume. Cost of sales surged by 27 percent in 2025 due to exorbitant gas prices. This resulted in 4.73 percent slide in gross profit in 2025 with GP margin falling down to 11.71 percent. The company streamlined its workforce from 429 employees in 2024 to 393 employees in 2025 which led to reduced payroll expense. Yet, administrative expense spiked by 23.72 percent in 2025 due to increased charity & donations.
Distribution expense slumped by 47.43 percent in 2025 due to a massive decline in outward freight & handling charges due to lower fuel charges during the year. Exchange loss of Rs.52.82 million coupled with increased profit related provisioning resulted in 125.67 percent spike in other expense in 2025. Conversely, other income dwindled by 32.33 percent in 2025 as no exchange gain and no unrealized gain on the re-measurement of investment was recognized during the year unlike previous year.
PSYL recorded 6.71 percent thinner operating profit in 2025 with OP margin ticking down to 9 percent. Finance cost descended by 21.25 percent in 2025 due to monetary easing and lesser short-term borrowings. This resulted in gearing ratio falling down to 43 percent in 2025. Share of loss from investment in associate, PetPak Films (Private) Limited, fell by 35.86 percent to clock in at Rs.204.55 million in 2025. PSYL also booked allowance of Rs.13.70 million on ECL in 2025 as against reversal of Rs.90.92 million booked in the previous year. Net profit ticked up by only 5.66 percent to clock in at Rs.367.452 million in 2025. This translated into EPS of Rs.2.65 and NP margin of 2.18 percent in 2025.
Recent Performance (9MFY26)
PSYL recorded year-on-year decline of 12.85 percent in its net sales which clocked in at Rs.10,652.13 million in 9MFY26. The unprecedented monsoon rain and floods in the first quarter of FY26 took its toll on the demand of the company’s products specifically from its clients in Punjab and KPK. Cost of sales decreased by 14.70 percent in 2026 due to cost control measures implemented by the management. While gross profit stayed intact at the last year level of Rs.1532 million, GP margin was recorded at 14.38 percent in 9MFY26 versus GP margin of 12.53 percent recorded in 9MFY25. In line with lower sales volume, distribution expense dwindled by 51 percent in 9MFY26.
Conversely, administrative expense mounted by 16.76 percent during the period under consideration most likely due to adjustment in minimum wage rate. Other expense mounted by 118.89 percent in 9MFY26 due to unrealized loss recorded on short-term investments. Other income strengthened by 60.58 percent in 9MFY26 expectedly on the back of increase in the company’s short-term investments and bank balances. PSYL recorded 2.81 percent deterioration in its operating profit in 9MFY26.
OP margin clocked in at 11.19 percent versus OP margin of 10 percent recorded during the same period last year. Finance cost nosedived by 15.93 percent in 9MFY26 due to monetary easing. On the contrary outstanding borrowings mounted during the period. Share of loss on investment in associate fell by 44.73 percent in 9MFY26.
Lower finance cost and thinner share of loss on investment in associate allowed PSYL to register 34.70 percent improvement in its bottomline which clocked in at Rs.395.463 million in 9MFY26. This translated into EPS of Rs.2.85 in 9MFY26 versus EPS of Rs.2.12 recorded in 9MFY25. NP margin also strengthened from 2.40 percent in 9MFY25 to 3.71 percent in 9MFY26.
Future Outlook
Adverse effects of heavy monsoon rains which destroyed huge areas of Punjab and KPK, will dampen the demand by suppressing the economic activity in the affected regions as well as nearby regions.
Moreover, supply chain disruptions will increase the cost. Besides, geopolitical tensions in the neighboring countries are also exerting acute pressure on input cost, logistics and supply chain besides creating demand destruction.
To counter rising cost, the company is increasingly investing in solar power and other alternate energy solutions. PSYL is also considering alternative supply chain solutions and new geographical markets to sustain its revenues and profitability.
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