After 19 straight months of growth, is now the time to invest in Pakistan’s digital economy?

Key takeaways:

• April 2025 IT exports hit US$317 million, marking the 19th straight month of year-on-year growth.
• Pakistan is on track for US$3.5–3.7 billion in IT exports in FY25, with a long-term target of US$10 billion by FY29.
• Policy changes like higher retention limits and foreign equity investment permissions are boosting industry confidence.

While headlines are often dominated by power outages and political noise, something remarkable is happening quietly in Pakistan’s tech sector: IT exports are surging—and not just for a few months, but for nearly two years straight.

April 2025 alone saw US$317 million in IT exports, a 2% year-on-year increase, making it the 19th consecutive month of YoY growth. And this isn’t a fluke. The total IT exports for the first 10 months of FY25 now stand at US$3.1 billion, up 21% compared to the same period last year.

What’s driving the growth?

It’s a combination of policy support, smarter companies, and a stable currency environment:

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• Global Expansion: Pakistani IT firms are winning new clients, especially in the GCC region.
• Higher Retention Limits: The State Bank of Pakistan increased the foreign currency retention limit from 35% to 50%, giving exporters more flexibility.
• Overseas Investment Access: Exporters can now use these funds for equity investments abroad, opening doors to global partnerships and subsidiaries.
• Currency Confidence: A stable PKR is encouraging companies to repatriate profits, strengthening the local economy.

According to a recent P@SHA survey, 62% of local IT companies are now maintaining specialized foreign currency accounts, signaling a professional shift in capital handling.

Is this growth sustainable?

The answer looks like a yes.

Pakistan’s IT sector has hit a structural stride, fueled by both local policy and global demand. The government’s Uraan Pakistan economic plan targets US$10 billion in IT exports by FY29. That implies a compounded annual growth rate (CAGR) of 28%, which, while ambitious, seems achievable given the recent trend.

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In fact, net IT exports (exports minus imports) for April came in at US$288 million, also up 2% YoY and well above the 12-month average of US$272 million.

The investor takeaway

Topline Securities believes the IT sector will grow 10–15% in FY25, and their top pick is Systems Limited (SYS), currently trading at a 2025 P/E of 14.6x and a 2026 P/E of 11.0x. That leaves enough room for valuation upside, especially in a sector that’s seeing both structural and cyclical tailwinds.

Tech is one of Pakistan’s best-kept secrets

Amid rising interest in textiles, agriculture, and energy, Pakistan’s IT sector is quietly building a solid export engine. For investors seeking exposure to a high-growth, policy-supported, and globally integrated segment of the economy, this is your signal.

Source: Topline Securities

⚠️ 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 →