What’s driving Pak Electron Limited’s (PAEL) earnings growth?

Pak Electron Limited (PAEL) is receiving target price boosts backed by earnings growth. We tried to look at what’s driving this optimism among PSX investors.

The company’s power division is expected to deliver a 40% sales growth in 2025 up to PKR 32 billion due to a vibrant export order of power transformers to the USA market that has an amount of $50 million. These exports are anticipated to deliver gross margins of more than 30%.

Therefore, the appliances division is also expected to give back and achieve growth and sales of PKR 38 billion YoY in 2025, owing to the ease of import restrictions as well as better consumer financing, courtesy of economic stability. Moreover, there is a macroeconomic environment that depicts a lower KIBOR rate at 13.4%, and inflation at 7% in 2025 is expected to stabilize.

Nonetheless, many challenges persist, including the problems with the import restrictions which cause disruptions within the supply chains, potential devaluation of PKR, and strengthening of the market competition. 

According to our database, PAEL has an average analyst price target for Dec 2025 of Rs. 56.5 based on estimates of 2 different analysts. This includes the highest price target of Rs. 58 by Topline Securities and the lowest price target of Rs. 55 by Sherman Securities.

The average analyst price target of Rs. 56.5 implies an upside of 36% from here on. The stock’s dividend yield is expected to stay at around 3.6% for 2025 provided it pays out a dividend.