KARACHI: Inspite economic challenges and contrary to market expectations, the KSE-100 index companies’ earnings have grown by 37 percent on Quarter on Quarter basis to Rs 352 billion in the third quarter of FY23. In US$ terms, earnings are also up 17 percent.

“The increase in profitability was largely led by Oil and Gas Exploration (E&Ps) where profitability was up 60 percent on QoQ, Banks up 25 percent QoQ and OMCs where sector reported earnings of Rs 18 billion in 3QFY23 versus loss of Rs 3.3 billion in 2QFY23,” Sunny Kumar at Topline Securities said.

Excluding these three sectors, KSE-100 index profitability was flat in 3QFY23.

Other sectors like Textile, and Chemicals also gave major support during 3QFY23, with QoQ profitability growth of 277 percent and 131 percent, respectively.

Only two out of fourteen sectors, i.e., Automobile, and Power reposted loss of Rs 7.1 billion and Rs 5.8 billion, respectively in 3QFY23.

On YoY basis, profitability of KSE index companies grew 15 percent (down 22 percent YoY in US$). This takes 9MFY23 earnings growth to 8 percent YoY (down 21 YoY in US$), led by E&Ps, Banks and Technology.

Interestingly dividend payout of KSE-100 index companies was up by 57 percent YoY to Rs 92 billion in 3QFY23. This was led by Fertilizers and Banks.

“For analysis, we have taken 89 companies out of the total 100 companies (that have announced their results), which represents 90 percent of KSE-100 index market capitalization. We believe that adding remaining companies would not materially impact profitability growth trend”, he said.

Copyright Business Recorder, 2023