Top 5 Stocks with Explosive Earnings Growth

Posted by: Aamir Hayat Like: 0 Post Date: June 6, 2026

Top 5 Stocks with Explosive Earnings Growth

Five companies on the Pakistan Stock Exchange with the highest expected average earnings growth heading into 2027, based on the latest quarterly results and corporate briefing data. Earnings growth is the engine behind long-term stock market returns. When a company’s profits grow strongly and consistently, its stock price tends to follow over time. This post focuses on five companies listed on the Pakistan Stock Exchange that stand out for one reason: their earnings are expected to grow at an exceptional pace heading into 2027. These are not stories built on hope. Each company in this list is backed by real, documented developments: a plant coming online, a duty structure that has shifted in its favour, a power cost falling sharply, a new export market opening up. The data here is drawn exclusively from the latest quarterly results and corporate briefings available for each company: no external assumptions, no speculation beyond what management has stated. From chemicals to steel, from textiles to consumer electronics, these five companies reflect different corners of the economy. What they share is a compelling earnings recovery story that investors would do well to understand in detail.

Five Companies at a Glance

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EPCL Chemicals · Power transition and HPO momentum 81% EPS
ISL Steel · Policy tailwinds and market share gains 58% EPS
MUGHAL Steel · Captive power and bar mill upgrade 47% EPS
ILP Textiles · Capacity ramp and export expansion 39% EPS
AIRLINK Technology · Assembly growth and SEZ expansion 30% EPS

EPCL — Engro Polymer and Chemicals Limited

Expected Average 2027 EPS Growth Rate 81%

Market Cap: PKR 29.99 bn

Total Shares: 908.92 mn

Free Float: 227.23 mn

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Results Period: 1QCY26

EPS Growth Target (Avg 2027): 81%

Latest Quarterly Results — 1QCY26

The first quarter of calendar year 2026 marked a meaningful turning point for EPCL. After a difficult period of losses, the company returned to profitability, delivering earnings per share of PKR 0.41. The quarterly numbers reflect a business that is beginning to stabilise and recover.

Net Sales: PKR 22,182 mn

Gross Profit: PKR 2,543 mn

Operating Profit: PKR 1,930 mn

EBITDA: PKR 2,934 mn

Profit After Tax: PKR 371 mn

Earnings Per Share: PKR 0.41

Corporate Briefing Highlights — May 2026

Return to Profitability: Earnings for the first quarter of 2026 rebounded to PKR 0.41 per share following a period of losses. This is the headline signal of a turnaround in progress. Alongside this, domestic volumes for the company expanded by 26%, confirming that the recovery is grounded in real demand rather than cost savings alone.

Hydrogen Peroxide Plant Performance: The Hydrogen Peroxide plant, which commenced operations in early 2025, has made a strong start in the market. By the end of its first year, it captured a 32% market share. The actual operational capacity of the facility has been validated at 31.5 thousand tonnes per annum, which exceeds its original rated capacity. This outperformance is a positive signal for the reliability and earning potential of this asset going forward.

HPO Capacity Validation

The Hydrogen Peroxide plant is running above its original design capacity at 31.5 kta, and has already secured 32% market share within its first year of operations.

Power Transition to the National Grid: One of the most significant developments disclosed in the May 2026 briefing is a PKR 10 billion infrastructure project currently underway to shift the plant’s power supply from expensive captive gas generation to the national grid. This is not a minor operational adjustment — it is a structural change to the company’s cost base.

Energy Cost Reduction — The Core Earnings Driver

The grid transition is projected to reduce power generation costs from PKR 36 to 47 per unit to PKR 27 to 32 per unit. For an energy-intensive chemical producer, this improvement in the unit cost of power flows directly to the bottom line.

Solar Energy Deployment: Alongside the grid transition, the company is deploying a 2MW on-site solar project. The initial phase of this solar installation is set to go online immediately, providing an additional layer of energy cost relief even before the main grid project is completed.

Strategic Partnership Decision Pending: A definitive corporate decision regarding a potential majority stake acquisition by a strategic partner is anticipated by June 2026. No further details have been disclosed at this stage, but the significance of a potential majority investor entering the company cannot be understated. This remains a key event for investors to monitor closely.

ISL — International Steels Limited

Expected Average 2027 EPS Growth Rate 58%

Market Share Gain (1 Year): 20% to 23%

Solar Contribution (FY26): 10% of requirements

EPS Growth Target (Avg 2027): 58%

A Regulatory Environment That Has Shifted in ISL’s Favour

ISL‘s investment case is, at its core, a story about policy alignment. Over the past year, multiple regulatory changes have converged in a way that structurally benefits domestic flat steel producers like ISL. These are not temporary tailwinds — they represent durable changes to the competitive landscape of the industry.

Anti-Dumping Duty on Chinese Galvalume: A 40.5% anti-dumping duty has been imposed on Chinese Galvalume, a product that directly substitutes for ISL‘s output. This is expected to unlock significant formal demand for local mills by making the imported alternative considerably more expensive for buyers.

Duty Structure — Widening the Advantage

The Federal Budget 2026 widened the effective duty spread from 5% to 7.5% by reducing the import duty on hot-rolled coil (the primary raw material) to 2.5%, while maintaining downstream duties on finished products. Lower input costs, protected output pricing.

Sales Tax Levelling in FATA and PATA Regions: A 10% sales tax has been levied on flat steel in the erstwhile FATA and PATA regions, where the effective rate had previously been zero. This removes a significant cost advantage that undocumented players in these regions previously held over formal producers likeISL, directly supporting the company’s market share growth in these geographies.

Energy Cost Optimisation:ISL‘s captive solar plant is now contributing 10% of its total power requirements in fiscal year 2026. A gradual transition towards grid-based power is also expected to cushion the company against higher natural gas tariffs applied to captive generation.

Strategic Export Certifications: The company has secured CE, SASO, and REACH certifications to serve customers in Europe, Malaysia, and the Middle East. The long-term goal is to raise exports to 25% of total revenue, adding a meaningful buffer against domestic demand cycles.

Reko Diq Project Exposure: Through a 17% equity stake in Chinoy Engineering and Construction (CECL), ISL is positioned to benefit from contracts related to the design and construction of an accommodation camp for the Reko Diq Copper-Gold mining project. This is an indirect but tangible exposure to one of Pakistan’s most significant infrastructure projects.

Quarterly Performance Trends — FY26

The demand recovery in ISL’s end-user markets has been sharp. Two-wheeler sales, a key downstream consumer of flat steel, jumped by 33% year over year during the first five months of fiscal year 2026. Volume recovery for the company is being driven by easing inflation and lower policy rates, stimulating growth in cyclical segments including automobiles, white goods, and furniture fittings.

Market Share Growth — Already Visible

ISL successfully raised its market share in the galvanized and cold-rolled segments from 20% to 23% within a single year. This gain was supported directly by the erosion of cost advantages previously held by imported products following regulatory tightening.

MUGHAL — Mughal Iron & Steel Industries Limited

Expected Average 2027 EPS Growth Rate 47%

Captive Power Plant: 36.5 MW Coal-Based

Bar Mill Upgrade Budget: PKR 2 to 3 bn

Sections Market Share (Target): Over 80%

EPS Growth Target (Avg 2027): 47%

Latest Quarterly Results — 1QFY26

Mughal‘s first quarter of fiscal year 2026 demonstrated a strong and broad-based improvement in financial performance. Profitability, margins, and finance costs all moved in the right direction simultaneously.

Profit After Tax (1QFY26)PKR 997 mn

Earnings Per Share: PKR 2.7

Gross Margin17% (up 8 pp YoY)

Raw Material Prices Down 17% YoY

Finance Cost ChangeDown 49% YoY

Other Income GrowthUp 35% YoY

The 8 percentage point improvement in gross margins was supported by a 17% decline in raw material prices. At the same time, a 49% year-on-year reduction in finance costs provided powerful financial leverage to the bottom line. A 35% increase in other income further strengthened the profit outcome for the quarter.

Corporate Briefing Highlights

Captive Power Plant Commissioning: MUGHAL is commissioning a 36.5 MW coal-based captive power plant, which is expected to become operational in the second half of fiscal year 2026. This is one of the most consequential developments in the company’s near-term outlook.

Energy Cost Reduction — Captive vs Grid

The new captive plant is projected to lower power costs to approximately PKR 20 to 27 per unit, compared to prevailing grid rates of PKR 35 to 38 per unit. This is not a marginal improvement — it is a step change in operating economics that will directly enhance gross margins once the plant goes live.

Bar Mill Modernisation: A PKR 2 to 3 billion upgrade of the existing bar mill is scheduled for completion in late fiscal year 2026. Once completed, this will transform the mill into a multipurpose facility capable of simultaneously producing rebars and mini-sections. This dual-product capability is not only a capacity improvement — it is a revenue-mix upgrade that opens entirely new customer and segment opportunities.

Market Share Ambition — Sections Segment

Following the bar mill modernisation, the company’s market share in the sections segment is anticipated to rise from 62% to over 80%. This is a step change in market dominance that would be very difficult for competitors to reverse quickly.

Sector Growth Positioning: The broader steel sector is projected to grow at 12% to 13% per year in volume terms, underpinned by a chronic housing deficit and sustained government infrastructure spending. MUGHAL is specifically positioned to capture a dominant share of this growth, given its expanding capacity and improving cost structure.

Raw Material Synergy: The company is internally consuming residual non-ferrous scrap for its ferrous segment. This internal recycling is estimated to meet 8 to 10% of MUGHAL‘s total ferrous scrap requirements, supporting margin stability and reducing dependence on external procurement.

Value-Added Product Focus: Management is concentrating on high-margin ferrous products that offer approximately 100% value addition. The finished product prices for these items are significantly higher than the cost of the raw materials used to produce them, creating an attractive economic profile at the product level.

ILP — Interloop Limited

Expected Average 2027 EPS Growth Rate 39%

Workforce: 37,000+ employees

Egypt Investment: USD 35 mn

Solar Capacity Target (FY26): 25 MW

Apparel Capacity Target (FY26): 1.6 mn garments/month

EPS Growth Target (Avg 2027): 39%

A Global Textile Leader with Expanding Capacity

Interloop is a vertically integrated textile company and a global leader in hosiery manufacturing. Its client base reads like a directory of the world’s most recognised sportswear and apparel brands, including Nike, Adidas, Puma, and H&M. The company operates with a workforce of over 37,000 employees and derives the majority of its revenue from international markets across the United States, Europe, and Asia. Its production spans hosiery, denim, activewear, and apparel.

Corporate Briefing and Projections — 2026 and 2027

Earnings and Revenue Projections: Earnings per share for fiscal year 2026 are projected to reach PKR 6.81, with a significant further increase to PKR 13.12 estimated for fiscal year 2027. Net sales are forecast to grow by 15% in FY2026 and accelerate to 24% growth in FY2027.

EPS Projection (FY26): PKR 6.81

EPS Projection (FY27): PKR 13.12

Revenue Growth (FY26 Forecast): 15%

Revenue Growth (FY27 Forecast): 24%

Operational Turnaround: A major improvement in operating profit and earnings is expected through FY2026 and FY2027, driven by improved utilisation rates at expanded apparel, hosiery, and denim plants. The capacity additions made over recent years are now expected to translate into visible financial returns as utilisation climbs.

Denim Segment Expansion: Seven new production lines are scheduled to come online in the denim unit by the fourth quarter of FY2026. As these lines are commissioned, the denim segment is expected to see meaningful margin expansion — both from the improved absorption of fixed costs and from a stronger revenue base.

Egypt Investment — USD 35 Million Expansion

The company is expanding its regional export base with a planned USD 35 million investment in Egypt. This facility is expected to be commissioned by the first quarter of calendar year 2027. Egypt provides access to both African and European markets and diversifies production away from Pakistan.

Apparel Segment Scaling: Apparel operations are targeted to reach a production capacity of 1.6 million garments per month by FY2026. The apparel segment is projected to reach its breakeven point by FY2027, meaning the losses from this relatively new segment are expected to turn into profit within the forecast window.

Renewable Energy: The company is targeting a total solar capacity of 25 MW by FY2026. This forms part of a broader sustainability drive and will also contribute meaningfully to energy cost management at the production level.

Sectoral Context — 2026

The domestic cotton sector is facing real pressure. National cotton production is facing a 30% shortfall against government targets for the FY2026 season, which is leading the textile industry to import approximately 4 million bales of raw cotton during 2026. This is an industry-wide input cost headwind that affects all textile producers.

However, Interloop’s positioning within premium, branded export channels, combined with its geographic diversification into the GCC region and Japan through the Uniqlo relationship, provides a buffer against both domestic supply challenges and regional tariff risks.

AIRLINK — AirLink Communication Limited

Expected Average 2027 EPS Growth Rate 30%

Revenue Projection (FY26): PKR 187,330 mn

Revenue Projection (FY27): PKR 230,861 mn

EPS Projection (FY26): PKR 20.2

EPS Projection (FY27): PKR 29.7

EPS Growth Target (Avg 2027): 30%

Data Note: No corporate briefing data or quarterly results for periods after 2025 are available in the source data for AirLink Communication. The information presented below is drawn from forward projections and strategic disclosures available from the company’s compiled data. All figures are projections only.

Business Overview and Revenue Projections

AirLink Communication has established a dominant position in Pakistan’s mobile manufacturing market through the local assembly of prominent brands including Xiaomi, Tecno, and Itel. The company’s assembly segment is expected to contribute between 76% and 80% of total revenue in fiscal years 2026 and 2027.

Revenue is projected to grow from PKR 187,330 million in FY26 to PKR 230,861 million in FY27. Net profit margins are anticipated to improve from 4.3% in FY26 to 5.1% in FY27, reflecting both revenue scale and the earnings contribution from the Special Economic Zone facility.

Strategic Growth Initiatives

Product Diversification: The company is expanding its portfolio beyond smartphones to include the launch of Xiaomi Smart TVs and affordable Acer laptops. These additions target gaps in the domestic electronics market where local assembly is currently limited and imported products dominate.

Smartphone Export Plans: There are plans to resume smartphone exports, with an assumed volume of 300,000 Xiaomi units in fiscal year 2026. This is intended to create a new foreign currency revenue stream for the business, reducing dependence on the domestic market alone.

Sundar Green SEZ — 10-Year Tax Holiday

The company is expanding into the Sundar Green Special Economic Zone using a 10-year tax holiday. This expansion is projected to have an incremental earnings impact of PKR 3.0 per share in fiscal year 2027, a meaningful addition to the base EPS forecast of PKR 29.7.

Dividend Outlook: Forecasts indicate dividends of PKR 7.0 per share for fiscal year 2026 and PKR 10.0 per share for fiscal year 2027. This represents a progressively growing cash return to shareholders, consistent with the improving earnings trajectory.

Electric Vehicle Ambitions: The company intends to enter the electric vehicle market by assembling the Xiaomi SU7 luxury sedan. This positions AIRLINK to benefit from the government’s push for green transportation infrastructure in Pakistan. No timeline or financial details have been disclosed in the available data.

Conclusion — Earnings Are Returning, and These Five Know Why

What these five companies share is a very specific kind of earnings recovery: one that is anchored to real, documented, operational changes. Not simply a rising tide lifting all boats but specific, company-level catalysts that are already in motion or firmly scheduled. EPCL is reducing the single largest cost in its business by moving to cheaper grid power. This is a structural shift in its economics that will persist for years after the PKR 10 billion project is complete. ISL is the beneficiary of a rare convergence of regulatory decisions — anti-dumping duties, sales tax enforcement, and a budget measure that simultaneously reduced its input costs while protecting output pricing. MUGHAL is commissioning power at nearly half the grid rate, while also upgrading its bar mill to manufacture more product types. Both changes address profitability from two different angles at the same time. ILP is converting years of capacity investment into revenue, with seven new denim lines coming online, an Egypt facility under construction, and a client base that includes the most powerful sportswear brands in the world. And AIRLINK, while lacking post-2025 disclosed results in the available data, carries a pipeline of initiatives, including a Special Economic Zone expansion, export resumption, and a diversified product range that together support a compelling multi-year earnings growth trajectory.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →

Top 5 Stocks with Explosive Earnings Growth

Top 5 Stocks with Explosive Earnings Growth

EPCL — Engro Polymer and Chemicals Limited