Should you shift gears on SAZEW now?

Key takeaways:

• 9MFY25 revenue grew 2.4x YoY to Rs. 81.4bn, driven by strong HAVAL four-wheeler sales
• Earnings rose nearly 3x YoY to Rs. 12.9bn (EPS: Rs. 212.7)
• Gross margins improved to 30.5%, expected to remain firm until FY26
• Expansion plan targets doubling daily production by Mar’26
• Rs. 11.5bn capex announced for NEV expansion, warehousing, and solar upgrades

Sazgar Engineering Works Ltd. (SAZEW) has posted a solid set of numbers for the first nine months of FY25, with revenues climbing to Rs. 81.4 billion, a 2.4x jump year-on-year, fueled by rising sales of four-wheelers—particularly the popular HAVAL brand. In the same period, earnings came in at Rs. 12.9 billion, nearly tripling YoY, thanks to volume growth and better margins.

HAVAL drives growth

The surge in revenue stems largely from strong four-wheeler demand, with SAZEW’s HAVAL SUV lineup continuing to gain traction in the market. While April 2025 sales were dented by a 12-day road closure in Sindh and Punjab, the company remains on track to scale further.

Gross margins also rose significantly to 30.5% compared to 25.8% in the same period last year, as scale efficiencies kicked in. Management expects margins to stay elevated at least until FY26, when the current auto policy expires.

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Expansion on the horizon

SAZEW is preparing for the next phase of growth with an ambitious Rs. 11.5 billion capital expenditure plan. This includes:

• A new paint workshop
• Dedicated NEV (New Energy Vehicles) assembly facilities
• Expanded warehousing
• A 5.7 MW solar energy system for cost-efficient power

Production capacity for the four-wheel segment is expected to more than double from 43 units/day to 90–100 units/day by March 2026, following the completion of the expansion.

New Energy Vehicles (NEVs) in focus

SAZEW is set to enter the NEV space with new SUV and double-cabin models, though these will fall outside the current greenfield policy. While there’s uncertainty regarding the new NEV incentives, the company is positioning itself early in this high-potential segment.

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Three-Wheeler segment & exports

Although electric rickshaw sales remain soft due to their Rs. 1 million price tag, SAZEW continues to export its three-wheelers to Japan and Liberia, ensuring geographic diversification and FX inflows.

Investor Outlook

While the company is not formally under analyst coverage, the latest results reflect a well-run, high-growth player that’s actively scaling in one of Pakistan’s most dynamic automotive segments. With:

• A proven product (HAVAL)
• Rising volumes and margins
• A well-funded expansion strategy
• Entry into NEVs and renewable energy

SAZEW presents an attractive long-term growth story for investors looking at the intersection of auto innovation, electrification, and consumer demand in Pakistan.

Source: AKD Securities Limited

⚠️ 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 →