Pak Datacom Limited (PSX: PAKD) was incorporated in Pakistan as a private limited company in 1992 and was converted into a public limited company in 1994. The principal activity of the company is the setting up, operating and maintaining a network of data communication and serving needs of the customers.
Pattern of Shareholding
As of June 30, 2025, PAKD has a total of 11.859 million shares outstanding which are held by 2475 diverse shareholders. 55.08 percent of PAKD’s shares are held by its associated companies, undertakings and related parties followed by local general public holding 32.27 percent of the company’s shares.
Banks, DFIs, NBFIs and Insurance companies have a stake of 6.75 percent in the company while Modarabas & Mutual Funds account for 1.83 percent shares. Around 1.46 percent of PAKD’s shares are held by its Directors, CEO, their spouse and minor children. The remaining ownership is distributed among other categories of shareholders.
Historical Performance (2019-25)
Except for a dip in 2020, PAKD’s topline delivered year-on-year growth over the period under consideration. Conversely, its bottomline dipped thrice i.e. in 2020, 2024 and 2025. The company’s margins exhibited fluctuations throughout the period under review (see the graph of profitability ratios).
Gross margin touched its optimum level in 2019 while net margin and operating margin peaked in 2023 and 2024 respectively. Owing to other income and finance income made by the company, its operating margin and net margin often exceeded its gross margin. The detailed performance review of the period under consideration is given below.
In 2019, PAKD’s topline grew by 18.67 percent year-on-year to clock in at Rs. 947.07 million. This mainly came on the back of growth in the revenue from communication value added services (CVAS). Conversely, telecom infrastructure services registered a plunge during the year.
Overall, the year was difficult for the telecom industry owing to sharp depreciation of Pak Rupee, high inflation and hike in energy prices. However, PAKD’s efforts to rationalize its media cost, terrestrial cost, network and other operational cost resulted in 56.15 percent improvement in its gross profit in 2019. This translated into GP margin of 24.57 percent in 2019 versus GP margin of 18.67 percent posted in 2018.
Operating expense posted a marginal 0.94 percent growth in 2019 which was mainly on account of advertisement and marketing expense incurred during the year. Impairment booked on financial assets spiked by 118.62 percent in 2019.
Operating profit magnified by 86.93 percent year-on-year in 2019 with OP margin picking up to 7.40 percent from OP margin of 4.70 percent registered in 2018. PAKD recognized finance income of Rs.88.70 million in 2019 as against the finance cost of Rs.1.93 million incurred in 2018. This resulted in 654.11 percent bigger net profit in 2019. Net profit stood at Rs. 143.02 million in 2019 with NP margin clocking in at 15.10 percent versus NP margin of 2.38 percent posted in 2018. EPS also climbed up from Rs.1.94 in 2018 to Rs.14.59 in 2019.
With 18.65 percent year-on-year shrinkage in its topline, 2020 was yet another complicated year for PAKD. Net sales clocked in at Rs.770.44 million in 202.
The decline in turnover was due to the outbreak of COVID-19 and the country-wide lockdowns which curtailed the special business projects and telecom infrastructure services of the company during the year. This offset the growth seen in class value-added services (CVAS).
High inflation and Pak Rupee depreciation continued to take its toll on the financial performance of the company, resulting in 37.24 percent smaller gross profit recorded in 2020 with GP margin sliding down to 18.95 percent. Operating expense surged by 16.70 percent year-on-year in 2020 mainly on account of higher payroll expense due to inflationary pressure and also because the workforce increased from 220 employees in 2019 to 223 employees in 2020.
PAKD kept a check on its advertisement and promotional activities during the year to achieve operational efficiency yet couldn’t help operating profit from registering 40.61 percent year-on-year decline in 2020. OP margin also fell to 5.40 percent in 2020. PAKD’s finance income also squeezed to Rs.5.65 million in 2020, down 93.63 percent year-on-year due to lower exchange gain as company’s foreign business was greatly affected by COVID-19 related restrictions on the movement of people and goods.
Finance lease charges also trimmed down the finance income in 2020. As a consequence, net profit measured down by 94.82 percent year-on-year in 2020 to clock in at Rs.7.41 million with EPS of Rs.0.69 and NP margin of 0.96 percent.
2021 was the recovery year for PAKD with 16.45 percent year-on-year rebound in its net sales which clocked in at Rs.897.21 million.
The topline growth was primarily the effect of specialized projects executed by the company in 2021. Improved turnover due to the completion of projects which were halted during the lockdown period coupled with widespread cost cutting measures and strengthened local currency culminated into 24.61 percent year-on-year rise in gross profit in 2021 with GP margin ascending to 20.28 percent.
Operating expense grew by 7.17 percent year-on-year due to hike in payroll expense and advertisement expense in 2021. Superior other income on account of excessive plan assets of gratuity fund realized back also propelled the operating performance. Operating profit picked up by 86.90 percent year-on-year in 2021 with OP margin rising to 8.67 percent.
PAKD incurred finance cost of Rs.9.71 million in 2021 as against finance income recorded during the past two years. This was the consequence of exchange loss incurred during the year. The bottomline posted 107.29 percent increase to clock in at Rs.15.367 million with EPS of Rs.1.30 and NP margin of 1.71 percent in 2021.
PAKD continued its growth trajectory with a stronger topline growth of 38.13 percent year-on-year in 2022. Net sales were recorded at Rs.1239.28 million in 2022.
All the revenue streams of the company i.e. CVAS, specialized projects and telecom infrastructure services showed staggering performance during the year. Steep depreciation of Pak Rupee, unprecedented level of inflation and elevated energy prices pushed the cost of sales up by 52.50 percent year-on-year in 2022. This squeezed the gross profit by 18.38 percent year-on-year, translating into a thinner GP margin of 11.98 percent.
Operating expense spiked by 6.11 percent year-on-year in 2022. While payroll expense was in check during the year, higher repair and maintenance charges, travelling and conveyance charges and depreciation on the right-of-use assets were the main drivers for higher operating expense in 2022.
Other income registered a robust 285.78 percent rebound in 2022 on account of liabilities written back during the year. This drove the operating profit up by 142.13 percent year-on-year in 2022 with OP margin climbing up to 15.20 percent. Splendid exchange gain on international business on account of Pak Rupee depreciation resulted in finance income of Rs.66.20 million in 2022. Net profit multiplied by 1405.13 percent in 2022 to clock in at Rs.231.30 million with EPS of Rs.19.5 and NP margin of 18.66 percent.
PAKD’s topline growth was recorded at 9.97 percent year-on-year in 2023. This drove the net sales up to Rs.1362.84 million in 2023. Topline growth was primarily the result of superior revenue from CVAS. Improved revenue mix, upward revision in the prices of services and cost cutting measures adopted by the company buttressed the gross profit which picked up by 94.52 percent year-on-year in 2023. GP margin also posted a remarkable improvement to reach 21.19 percent in 2023.
Operating expense surged by 32 percent year-on-year in 2023 on account of higher payroll expense (despite reduction in the number of employees from 227 in 2022 to 193 in 2023), higher advertisement and marketing expense as well as higher vehicle running and travelling expense. Other income slid by 35.94 percent year-on-year in 2023 due to high-base effect produced by liabilities written back in 2022.
Higher operating expense and lower other income took its toll on the operating profit of PAKD which slipped by 16.79 percent year-on-year in 2023 with OP margin inching down to 11.50 percent.
Tremendous finance income of Rs.242.39 million recognized during 2023 due to massive exchange gain proved to be the game changer for PAKD’s financial performance and culminated into 25.32 percent higher net profit registered in 2023. PAKD’s net profit stood at Rs.289.86 million in 2023 with EPS of Rs.24.44 and NP margin of 21.27 percent – the highest NP margin recorded during the period under consideration.
In 2024, PAKD recorded 23.67 percent year-on-year rise in its topline which clocked in at Rs.1685.39 million. This was on account of a staggering rise in revenue from CVAS and specialized projects. The company also added a new revenue stream as it made solar equipment sales during the year. Conversely, revenue from telecom infrastructure services ticked down during the year. Cost of sales grew by 19.23 percent in 2024, resulting in 40.15 percent improved gross profit recorded in 2024 with GP margin jumping up to 24.02 percent.
Operating expense surged by 23.82 percent in 2024 mainly on account of higher payroll expense due to inflationary pressure. The company squeezed its workforce from 193 employees in 2023 to 186 employees in 2024. PAKD booked reversal of impairment loss on financial assets worth Rs.41.22 million in 2024. This was against the booking of impairment loss on financial assets worth Rs.32.06 million in 2023.
Other income posted a marginal growth of 2.38 percent in 2024. While return on bank deposits and short-term investments as well as gain on disposal of fixed assets and income from other non-financial assets grew during the year, high-base created by liabilities written back in 2023 resulted in a minor uptick in other income in 2024. Operating profit posted 89.80 percent year-on-year progress in 2024 with OP margin attaining its highest level of 17.65 percent.
PAKD recorded finance cost of Rs.33.04 million in 2024 as against finance income of Rs.242.39 million recorded in the previous year. This was the consequence of exchange loss incurred in 2024 versus exchange gain recorded in the previous year. Net profit slumped by 33.68 percent in 2024 to clock in at Rs.192.22 million with EPS of Rs.16.21 and NP margin of 11.41 percent.
In 2025, PAKD’s net sales picked up by 10.13 percent to clock in at Rs.1856.06 million. While revenue from CVAS/ Data Communication services contribute the most to the sales mix of the company, it posted year-on-year decline in 2025. Telecom infrastructure services also registered a dip in 2025.
On the flipside, solar equipment sales and specialized sales posted year-on-year growth in 2025. Cost of sales surged by 15.62 percent in 2025 primarily due to higher cost of raw materials, specialized projects cost, channel and local lead rentals and space segment rentals. This squeezed the gross profit by 7.25 percent in 2025 with GP margin falling down to 20.23 percent.
Operating expense slumped by 6.90 percent in 2025 due to lower payroll expense as the company rationalized its workforce from 186 employees in 2024 to 162 employees in 2025. As against reversal booked in the previous year, PAKD recorded impairment loss on financial assets worth Rs.2.79 million in 2025. 10.48 percent uptick in other income in 2025 was the result of liabilities written back during the year. This included customer deposits and trade creditors written back.
PAKD recorded 14.34 percent deterioration in its operating profit in 2025 with OP margin falling down to 13.73 percent. Finance cost went down by 57 percent in 2025 mainly due to lower exchange loss. Net profit dwindled by 20.43 percent to clock in at Rs.152.95 million. This translated into EPS of Rs.12.90 and NP margin of 8.24 percent in 2025.
Recent Performance (1QFY26)
During the first quarter of the ongoing fiscal year, PAKD’s net sales posted year-on-year uptick of 5.97 percent to clock in at Rs.304.303 million. Revenue from CVAS continued to slide during the period and greatly overshadowed the growth recorded by specialized projects revenue and solar equipment sales during the period.
Telecom infrastructure services sales remained stable in 1QFY26. Besides reduced demand, restrictions on the opening of letter of credit also contributed in compressing PAKD’s business activity in 1QFY26.
Higher cost of raw materials, specialized projects cost, channel and local lead rentals and space segment rentals pushed the overall cost of sales by 10.93 percent in 1QFY26. This resulted in 5.79 percent contraction in gross profit in 1QFY26 with GP margin clocking in at 26.39 percent versus GP margin of 29.68 percent recorded in 1QFY25.
Operating expense surged by 17.82 percent in 1QFY26 mainly on the back of elevated payroll expense, marketing & advertising expense as well as travelling & conveyance charges incurred during the period.
Reversal on impairment booked on financial assets plunged by 54.97 percent in 1QFY26. Robust income from non-financial assets resulted in 54.59 percent stronger other income in 1QFY26. Operating profit contracted by 15.23 percent in 1QFY26 with OP margin sinking to 16.68 percent versus OP margin of 20.86 percent recorded in 1QFY25. Finance cost slid by 1.58 percent in 1QFY26 due to thinner exchange loss recorded during the period.
PAKD recorded net profit of Rs.34.33 million in 1QFY26, down 10.74 percent year-on-year. This translated into EPS of Rs.2.90 in 1QFY26 versus EPS of Rs.3.24 posted in 1QFY25. NP margin nosedived from 13.39 percent in 1QFY25 to 11.28 percent in 1QFY26.
Future Outlook
Pakistan demographic break-up shows that there is a large proportion of population under 30 years old who are eager to adopt new technologies and digital services. This may result in improved demand of mobile connectivity and high-speed internet.
Besides, the growing trend of online education, remote work, entertainment, e-commerce, digital transformation across various sectors etc will also fuel the demand for PAKD’s services. The company has also recently ventured into the sale of solar equipments. This diversification of revenue streams will also prove to be rewarding for the company.
The key areas of growth for PAKD include expansion of rural connectivity, improving government sector engagement and incorporation of cloud and cyber security offerings. Providing green energy solutions, expansion of fiber optic networks and leveraging emerging technologies such as AI and IoT are also potential opportunity areas for PAKD.