Shams ul Nisa

Pakistan Stock Exchange Limited (PSX) saw an astounding growth of about 220.2% in profit after tax, which reached Rs507.18 million during the first half of the current Fiscal Year

2023-24. The PSX reported an after-tax profit of Rs158.38 million for the same time in the previous year, according to WealthPK. The company attributed this increase in income to higher volumes, interest rates, and more revenue earned from the trading activities. The company's revenue increased by 48.7% year-over-year to Rs1.08 billion in 1HFY24 from Rs729.6 million during the same time the previous year. In terms of costs, the company's operating costs in 1HFY24 were Rs971.4 million, which was 23.59% more than the operating costs of Rs786.03 million in 1HFY23. This is a result of PSX's efforts to upgrade infrastructure, provide new products for investors, and support listed companies.

As a result, the company turned an operating loss of 56.43 million in 1HFY23 to an operating profit of Rs113.4 million. Similarly, PSX earned an amount of Rs30.9 million from other income in 1HFY24 against other expenses of 21.69 million in the same period last year. This suggests that during this period, the company effectively handled its other costs. In the first half of FY24, its profit before tax increased from Rs178.8 million to Rs561.4 million, a 213.91% increase. During 1HFY24, the company bore a tax of 54.25 million, representing a surge of 165.03% compared to the same period the previous year.

Historical trend

From Rs1.24 billion in 2018 to a peak of Rs2.09 billion in 2021, PSX's overall income grew over this period. However, it fell to Rs1.88 billion in 2022 and then to Rs1.82 billion in 2023, indicating decreased operational benefits. Between Rs1.12 billion in 2018 and Rs1.5 billion in 2023, the company's total expenses showed a gradual increase. Over the six years, the profit after tax reached its maximum in 2021 at Rs696.0 million from 62.0 million in 2018. However, it slipped to 399.0 million in 2022 and 220.0 million in 2023.

Financial position

During the six years, PSX's total equity increased progressively, peaking at Rs10.39 billion in 2023 compared to Rs8.7 billion in 2018. Liabilities held by the company totaled Rs2.64 billion in 2023 as opposed to Rs1.46 billion in 2018, showcasing growing dependency on external financing. The company's ambition of expanding its capital is observed in the total assets, which grew to Rs13.03 billion in 2023 from Rs10.17 billion in 2018.

Ratios analysis

Over the six years, the current ratio stayed above 1.2, suggesting ample current assets by the company to pay short-term obligations. The quick ratio assesses a company's capacity to pay short-term debt with its most liquid assets. PSX's quick ratio stayed below 1 in 2018 and 2019, suggesting that the firm did not have enough liquid assets to cover its current liabilities.

However, the quick ratio continued to grow above 1 from 2020 to 2023, indicating a decreased level of risk. From 5% in 2018 to a peak of 33% in 2021, the net profit margin expanded, but in 2022 and 2023, it fell to 21% and 12%, respectively. With fluctuation over the years, the company's expenses as a proportion of revenue decreased generally, from 91% in 2018 to 86% in 2023. The profit before tax as a proportion of revenue grew from 9% in 2018 to 14% in 2023, with 2021 recording the greatest percentage of 34%.

Company Profile

PSX was established on March 10, 1949, as a Company Limited by Guarantee, but was reregistered as a public company limited by shares on August 27, 2012. The company's activities include buying, selling, and trading in shares, scripts, modaraba certificates, participation term certificates, stocks, bonds, debentures, government papers, loans, and any other similar instruments and securities, such as bearer national fund bonds, special national fund bonds, foreign exchange bearer certificates, and special national fund bonds issued by the Pakistani government or any other institution authorized by Government of Pakistan.

Credit: INP-WealthPk