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!

• 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.

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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 →