These 5 Could Soar in FY26 according to Arif Habib Limited

Posted by: KSEStocks Data Like: 7 Post Date: July 11, 2025

2. Pakistan Petroleum Ltd (PPL)

Pakistan Petroleum remains one of the most compelling value stocks in the exploration and production sector. Backed by a series of recent discoveries, strong cash reserves, and long-term exploration upside, PPL offers solid earnings visibility and significant rerating potential.

Recent Performance

Trading at a forward P/E of just 4.9x, PPL is currently the cheapest stock in the sector. Its earnings outlook is supported by recent success on the exploration front. In FY25 alone, the company announced six discoveries, adding a combined 908 barrels per day of oil and 94 mmcfd of gas, with an estimated EPS impact of PKR 2.87 per share on an annualized basis.

Exploration remains a central growth pillar. The company’s well in Abu Dhabi is under evaluation, and any success there could materially enhance its earnings profile. Additionally, PPL has partnered with OGDC, MARI, and Turkiye Petrolleri to jointly bid for 40 offshore blocks, a move that positions it for long-term reserve growth and production sustainability.

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On the financial front, PPL holds a robust cash balance of PKR 133 billion, equivalent to PKR 49 per share. This provides ample flexibility to fund capital projects while increasing shareholder returns through higher dividend payouts.

Margins remain healthy, with net profit margins near 40 percent, and book value is expected to rise to PKR 287 per share by FY26, reinforcing the stock’s deep value credentials.

Price Target and Return Potential

Arif Habib Limited estimates a June 2026 target price of PKR 239.7 for PPL, translating to a total return of 49.4 percent. This includes an expected FY26 dividend of PKR 12 per share, offering a dividend yield of 6.96 percent. For investors seeking a mix of near-term earnings momentum and long-term exploration upside, PPL stands out as a strong candidate in the energy sector.

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⚠️ 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 →