Rs 287 EPS & hybrid launch ahead: Why Sazgar deserves a look?

Sazgar Engineering set for record profits in FY25

Sazgar Engineering (SAZEW), the company behind the popular four-wheelers in Pakistan, is gearing up for an impressive financial year. Here’s why investors and auto fans are excited:

Big jump in profits and sales

In FY25, Sazgar is expected to earn Rs 287.6 per share, which is 119% higher than last year. That means the company will more than double its profit!

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• Sales growth: 90% increase in total revenue, reaching Rs109.7 billion
• Gross profit: Up by 115%, thanks to better pricing and stable exchange rates
• Net profit: Rs17.4 billion, 119% more than last year
• Dividend: The Company is expected to pay Rs 47 per share, a 135% increase

What’s driving the growth?

• Stronger 4-wheeler sales: 23% higher than last year
• Better pricing and currency stability: Helped keep costs in check
• Cost control: Expenses remained well managed, especially finance costs

Even though there was a 24% decline in sales compared to the last quarter (due to high sales in January), the overall yearly numbers look strong.

Future looks bright: new hybrid vehicles

Sazgar is now preparing to enter the plug-in hybrid electric vehicle (PHEV) market before March 2026. That means cleaner, more efficient cars.

• Forecasts suggest unit sales may grow by 9% each year from FY26 to FY28
• Targeting monthly sales of 1,250–1,500 hybrid units by FY27
• Expected earnings for the next 3 years:
  • FY27: Rs227
  • FY28: Rs266
  • FY29: Rs295

What about risks?

The company’s gross profit margin (currently 30.6%) might drop a bit after auto industry incentives expire in 2026. But even with that, Sazgar is expected to remain profitable and competitive.

Valuation and stock target

Sazgar’s share price is expected to rise, with analysts setting a target of Rs1,667 per share by June 2026. That includes a potential return of 40% (with dividend).

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Currently, the stock trades at an attractive valuation of:

• 4.02x estimated earnings for FY26
• 5.38x for FY27
• 4.60x for FY28

Bottom line

Sazgar Engineering is on a roll. With strong sales, big profits, and plans for hybrid vehicles, it is becoming a key player in Pakistan’s auto sector. For investors, it offers both growth and solid dividends. For customers, it promises innovation on wheels.

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 →