Shams ul Nisa

Pakistan Stock Exchange (PSX) Limited’s post-tax profit witnessed an impressive increase of 171.2%, clocking in at Rs146.68 million during the first quarter of the ongoing fiscal year (1QFY24) compared to Rs54.09 million in the same period the previous fiscal, reports WealthPK. The company attributed this rise to the increase in revenue due to greater trading activities and higher interest rate. Going by the results, the company’s revenue surged 20.0% year-on-year to Rs429.06 million as compared to Rs357.49 million in the same period last year.

On the expense side, the operating cost of the company stood at Rs459.5 million in 1QFY24, 20.94% higher than Rs379.8 million in 1QFY23. This is because PSX has continued to invest in and improve the infrastructure and introduce new products for both investors and listed companies. Therefore, the operating revenue grew 35.54% to Rs30.48 million in 1QFY24 from Rs22.49 million in 1QFY23.

Similarly, PSX's other income remained positive with a value of Rs4.14 million in 1QFY24 compared to a negative value of Rs32.3 million in 1QFY23. This indicates that the company efficiently managed its other expenses during the quarter under review. The profit-before-tax jumped by 136.64% to Rs130.5 million in 1QFY24 from Rs55.15 million in 1QFY23. The company witnessed an exponential surge in tax by 1,622.32% during the period under review.

Historical trend

PSX’s total income increased from Rs1.24 billion in 2018 to a peak value of Rs2.09 billion in 2021. From there, it dropped to Rs1.88 billion in 2022 and to Rs1.82 billion in 2023. The company’s total expenses ranged between Rs1.12 billion in 2018 and Rs1.5 billion in 2023, indicating an overall hike in the company’s expenditure. During the six years, the profit-after-tax stood at the highest of value of Rs696.0 million in 2021 and the lowest of Rs62 million in 2018.

PSX’s total equity grew significantly over the six years, reaching a maximum of Rs10.39 billion in 2023. The company's liabilities totalled Rs2.64 billion in 2023 compared to Rs1.46 billion in 2018. The total assets continued to rise, valuing at Rs10.17 billion in 2018, reaching a peak of Rs13.03 billion in 2023, showcasing the company’s interest in widening its capital.

Ratios analysis

The PSX’s current ratio remained above 1.2 over the six years, indicating a lower risk of covering short-term obligations by using current assets. In contrast, the quick ratio, which evaluates the ability of a business to meet its short-term obligations with its most liquid assets, remained below 1 in 2018 and 2019, indicating the company was short of liquid assets to finance its current liabilities. However, the quick ratio remained above 1 from 2020 to 2023, suggesting a lower degree of risk.

The net profit margin improved from 5% in 2018 to the highest of 33% in 2021, but declined to 21% and 12% in 2022 and 2023, respectively. The company’s expenses as a percentage of revenue reduced to 86% in 2023 from 91% in 2018, but remained volatile in between. The profit-before-tax as a percentage of revenue grew overall from 9% in 2018 to 14% in 2023, with the highest percentage of 34% registered in 2021.

Credit: INP-WealthPk