{"id":13175,"date":"2026-07-07T16:51:31","date_gmt":"2026-07-07T11:51:31","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=13175"},"modified":"2026-07-07T16:51:33","modified_gmt":"2026-07-07T11:51:33","slug":"the-best-stocks-in-psx-for-the-long-term","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/the-best-stocks-in-psx-for-the-long-term\/","title":{"rendered":"The Best Stocks in PSX for the Long Term"},"content":{"rendered":"\n

Criteria:<\/strong> consistent dividend history, earnings resilience across cycles, dollar-linked or hard-asset revenue, strong ROE, and inflation-beating compounding potential over 3\u20135+ years.<\/p>\n\n\n\n

Introduction<\/h2>\n\n\n\n

The Pakistan Stock Exchange has long rewarded investors who are willing to hold quality businesses through the inevitable cycles of macro volatility. In a market shaped by inflation, rupee depreciation, and shifting interest rates, the ability to identify companies with structural advantages becomes more important than timing any single entry point. Long-term compounding on the PSX<\/a><\/strong> is not about catching trends. It is about owning businesses that generate resilient cash flows, maintain pricing power, pay consistent dividends, and grow their earnings regardless of the economic backdrop.<\/p>\n\n\n\n

This report covers five stocks that stand out as long-term holdings based entirely on data from their latest corporate briefings and most recent quarterly results for 2026. Each company has been selected on the basis of earnings quality, dividend sustainability, balance sheet strength, and the management’s stated strategy for the years ahead. The five names span commercial banking, Islamic finance, diversified conglomerates, and the energy sector. Together they represent a cross-section of Pakistan’s most durable economic engines, the kind of businesses that have survived policy rate swings, currency depreciation, and commodity cycles while continuing to generate returns for their shareholders.<\/p>\n\n\n\n

5. Meezan Bank Limited (MEBL)<\/h2>\n\n\n\n

Expected Average 2027 EPS Growth Rate\u00a010.5%<\/strong><\/p>\n\n\n\n

Pakistan’s Premier Islamic Bank and a National Compounder<\/h3>\n\n\n\n

Meezan Bank<\/a><\/strong> occupies a unique position in Pakistan’s financial landscape as the country’s largest and most recognised Islamic bank. It operates in a space where structural demand is growing, supported by a large and increasingly aware population seeking Shariah-compliant financial products. The bank’s first quarter results for 2026 demonstrated continued exceptional performance, with a consolidated Profit After Tax of approximately PKR 22 billion recorded for the three months ending March 2026. This level of profitability, combined with a strong capital base and a clean balance sheet, makes MEBL<\/a><\/strong> a compelling long-term holding for investors who want quality banking exposure through an Islamic finance framework.<\/p>\n\n\n\n

The bank also booked realized capital gains of approximately PKR 0.5 billion during the quarter. Net Interest Margins are projected to remain robust, stabilising near 6.1%<\/strong> for the full 2026 period, which is a meaningful figure in a normalising rate environment. One of the most striking features of MEBL<\/a><\/strong>‘s balance sheet is its asset quality. The infection ratio stands at approximately 2.5%<\/strong> to 2.6%<\/strong>, the lowest in the industry, backed by a coverage ratio exceeding 130%<\/strong>. This combination means the bank carries very little credit risk relative to its peers and has more than adequate provisioning in place even against the loans that are classified as non-performing.<\/p>\n\n\n\n

What Management Said in the April 2026 Briefing<\/h3>\n\n\n\n

The April 2026 corporate briefing showed a management team balancing growth ambition with regulatory prudence. The bank has set a deposit growth target of 20%<\/strong> to 25%<\/strong> for 2026, a significant expansion plan for a bank that already commands a large market share in the Islamic banking segment. A key pillar of this strategy is the mobilisation of zero-cost current accounts, which are expected to cross 55%<\/strong> of the deposit mix over the medium term. This would significantly lower the bank’s cost of funds and protect its margins in any environment where rates trend downward. Management is also focused on scaling the digital franchise as a way to deepen customer reach without proportionally adding to the physical cost base, with the cost-to-income ratio expected to stabilise near 35%<\/strong>.<\/p>\n\n\n\n

On the regulatory side, management has proactively acknowledged that upcoming changes to the reclassification of the banking book are expected to reduce the Capital Adequacy Ratio by 1%<\/strong> to 1.5%<\/strong>. This is being managed carefully and was addressed transparently in the briefing. Management also shared the same outlook as MCB<\/a><\/strong> regarding the interest rate cycle, believing the policy rate has bottomed out and anticipating a potential 1%<\/strong> to 2%<\/strong> hike in upcoming Monetary Policy Committee meetings, which would be a tailwind for banking sector margins broadly.<\/p>\n\n\n\n

Why it matters for long-term investors:<\/strong> An ROE of 31.9%<\/strong> projected for 2026 and 30.9%<\/strong> for 2027 is exceptional by any measure and significantly above its banking peers. Combined with the lowest infection ratio in the sector and a growing Shariah-compliant deposit franchise, MEBL<\/a><\/strong><\/strong> offers a rare combination of growth, quality, and compounding capacity.<\/p>\n\n\n\n

4. The Hub Power Company Limited (HUBC)<\/h2>\n\n\n\n

Expected Average 2027 EPS Growth Rate\u00a05.9%<\/strong><\/p>\n\n\n\n

Pakistan’s Largest Independent Power Producer Entering a Harvesting Phase<\/h3>\n\n\n\n

The Hub Power Company<\/a><\/strong> is the largest Independent Power Producer in Pakistan, operating a combined generation capacity of 2,289MW across a diversified portfolio of fuel sources that includes imported and local coal, hydel, and residual furnace oil. This capacity represents approximately 5%<\/strong> of the country’s total installed power generation base, which gives HUBC<\/strong> an indispensable position within the national energy grid. What makes HUBC<\/a><\/strong> particularly attractive as a long-term holding is the structure of its earnings: approximately 75%<\/strong> to 85%<\/strong> of its revenue is dollar-indexed, which creates a powerful and consistent hedge against rupee depreciation. For investors seeking a defensive utility that also carries meaningful long-term growth optionality, HUBC<\/strong> presents a compelling and multi-dimensional case.<\/p>\n\n\n\n

The financial results reported in February 2026 marked what management described as the beginning of a harvesting phase for the company. For the second quarter of fiscal year 2026, HUBC<\/strong> reported consolidated net earnings of PKR 10.6 billion, representing a 152%<\/strong> increase compared to the same period in the prior year. The EPS for the quarter rose to PKR 8.2, up from PKR 3.3 previously, a step-change improvement that reflects both stronger core operations and the maturing of its associate companies. For the full first half of fiscal year 2026, the consolidated EPS reached PKR 17.6. A notable driver of this profitability was the strong dividend inflows from power associates, with ThalNova contributing PKR 4 billion and Thar Energy contributing PKR 1 billion during the first half, demonstrating that the broader HUBC group is increasingly generating returns across multiple entities simultaneously.<\/p>\n\n\n\n

What Management Said in the February 2026 Briefing<\/h3>\n\n\n\n

The February 2026 corporate briefing revealed a management team actively reshaping HUBC<\/strong> from a single-purpose utility into a diversified conglomerate with exposure to automotive manufacturing, mineral exploration, and electric vehicle infrastructure. The most headline-grabbing development was the achievement of financial close in January 2026 for a Completely Knocked Down assembly plant established as a 50\/50 joint venture with Mega Motors to produce BYD vehicles in Pakistan. This plant is targeted for commercial operations in the second half of 2026, and if successful, would represent HUBC<\/strong>‘s first meaningful earnings stream outside the power sector. The strategic intent is clear: use the cash-generative core utility business to fund diversification into sectors with higher long-term growth potential.<\/p>\n\n\n\n

Alongside the automotive initiative, the company has made notable progress in two other areas. Through its subsidiary Hubco<\/strong> Green, a nationwide EV charging corridor has been established with 16 operational DC fast chargers ranging from 60kW to 120kW in capacity, with connectivity expected to reach Peshawar by late February 2026. This positions HUBC<\/strong> as an early mover in Pakistan’s EV infrastructure space, a market that is still in its very early stages. On the resource exploration front, through Prime International, in which HUBC<\/a><\/strong> holds a 40%<\/strong> stake, the company has completed seismic surveys for the offshore gas block named Zin, with management planning to commence drilling by late 2026 or early 2027 depending on rig availability. Adding further conviction to the company’s outlook, Mega Conglomerate increased its ownership stake in HUBC<\/strong> to 19.5%<\/strong> in early 2026, a meaningful endorsement of the company’s transformation strategy from one of its most informed shareholders.<\/p>\n\n\n\n

Why it matters for long-term investors:<\/strong> HUBC<\/strong>‘s stable dollar-indexed cash flows, growing dividend contributions from associate companies, and expansion into EVs, charging infrastructure, and offshore exploration provide multiple long-term earnings drivers. As these new businesses mature alongside its core power assets, investors could benefit from sustained cash generation and future earnings growth.<\/p>\n\n\n\n

3. Engro Holdings Limited (ENGROH)<\/h2>\n\n\n\n

Expected Average 2027 EPS Growth Rate\u00a010.5%<\/strong><\/p>\n\n\n\n

A Diversified Conglomerate With Multiple Growth Engines<\/h3>\n\n\n\n

Engro Holdings<\/a><\/strong> is one of the most diversified business groups listed on the Pakistan Stock Exchange, with significant exposure to fertilisers, polymers, digital infrastructure, telecommunications towers, and dairy. This breadth of subsidiaries provides investors with exposure to multiple economic themes through a single listed vehicle. The company’s first quarter results for 2026 reflected a meaningful profitability rebound, with a consolidated Profit After Tax of PKR 10.2 billion and an EPS of PKR 8.50 for the quarter. The results were driven by a combination of reversals in prior thermal asset adjustments and the positive contribution of the newly acquired Deodar asset to the connectivity portfolio.<\/p>\n\n\n\n

Several subsidiaries posted impressive individual results during the quarter. Friesland Campina Engro reported a 71%<\/strong> year-on-year increase in earnings, benefiting from a favourable shift in product mix and price-led growth. Engro Polymer returned to profitability after four consecutive quarters of losses, which is a significant turnaround signal. Engro Fertilizers contributed PKR 3.3 billion in 1QCY26 earnings, equivalent to an EPS of PKR 2.49 for that subsidiary, supported by urea sales of 279,000 tons. These individual subsidiary contributions illustrate the breadth of the group’s earnings base and its capacity to absorb weakness in one segment while others continue to perform.<\/p>\n\n\n\n

What Management Said in the March 2026 Briefing<\/h3>\n\n\n\n

The March 2026 corporate briefing highlighted the tower business as one of the most exciting near-term growth stories within the group. The telecommunications infrastructure segment is expected to scale substantially in 2026, with an estimated incremental revenue contribution of PKR 36 billion for the year. The current portfolio of 15,000 towers operates at a tenancy ratio of 1.25x, and management is focused on optimising this ratio to drive further margin expansion. With every additional tenant added per tower, the incremental revenue flows through at very high margins, making tenancy ratio improvement a powerful lever for earnings growth without significant additional capital deployment.<\/p>\n\n\n\n

The group also disclosed that it holds cash reserves of approximately PKR 65 billion, which it is actively deploying to evaluate new investment opportunities and further diversify its earnings base. This liquidity gives management flexibility to act on acquisitions or new business lines without needing to raise external capital. A notable headwind during the period was a total cash outflow of approximately PKR 14 billion due to super tax liabilities, which weighed on net cash generation. Looking ahead, the ROE is estimated at 18%<\/strong> for both 2026 and 2027, and the P\/E multiple compresses meaningfully from 8.2x in 2026 to 6.6x in 2027, suggesting the market is pricing in earnings growth ahead.<\/p>\n\n\n\n

Why it matters for long-term investors:<\/strong>\u00a0A portfolio of 15,331 telecom towers with room to grow the tenancy ratio, combined with PKR 65 billion in investable cash and a recovering polymer business, gives ENGROH<\/a><\/strong> multiple paths to earnings growth. The P\/E de-rating from 2026 to 2027 reflects anticipated earnings expansion, which long-term investors can benefit from by holding through the compounding cycle.<\/p>\n\n\n\n

2. Mari Energies Limited (MARI)<\/h2>\n\n\n\n

Expected Average 2027 EPS Growth Rate\u00a011.6%<\/strong><\/p>\n\n\n\n

A Defensive Energy Play Transforming Into a Diversified Resource Group<\/h3>\n\n\n\n

Mari Energies Limited<\/a><\/strong>, formerly known as MARI<\/a><\/strong> Petroleum, is no longer simply an oil and gas company. A formal strategic rebranding in 2026 signals a deliberate transformation into a broader resources and technology group, with management expanding the company’s mandate into mining, offshore exploration, and digital infrastructure. This repositioning is backed by a strong core business that continues to generate resilient cash flows and act as a system balancer in Pakistan’s national gas network. For long-term investors, MARI<\/a><\/strong> represents a defensive energy holding with embedded optionality across new sectors that could meaningfully expand earnings over a multi-year horizon.<\/p>\n\n\n\n

From an operational standpoint, MARI<\/a><\/strong> sustained a stable production profile while the broader industry faced meaningful contractions, reinforcing its status as a core and reliable supplier in the national gas system. The Waziristan block is now contributing approximately 70 mmscfd of gas and 700 barrels per day of condensate, accounting for roughly 9% <\/strong>of total current production. The Ghazij and Shawal reservoirs are currently producing 48 mmscfd, with a phased development plan targeting 220 mmscfd by the second half of 2028, which represents a substantial production ramp from existing fields already in the portfolio. Reserve replacement stands at a sector-leading 278%<\/strong>, with total 2P+2C reserves and resources at an all-time high of 952 MMBOE, providing long-term production visibility that few companies on the PSX can match.<\/p>\n\n\n\n

What Management Said in the 2026 Briefing<\/h3>\n\n\n\n

The 2026 corporate briefing was one of the most strategically rich of any PSX-listed company. MARI<\/a><\/strong> secured stakes in all 23 awarded offshore blocks in the recent bidding round and is serving as operator for 18 of them, which is an extraordinary commitment to frontier exploration that positions the company for potential reserve discoveries over the next several years. Through its wholly owned subsidiary MARI<\/a><\/strong> Minerals, the company is exploring copper and gold in the Chagai district of Balochistan, recently agreeing to transfer a 49%<\/strong> working interest in two licenses to Globacore to accelerate the development timeline. This mining exposure gives MARI<\/a><\/strong> optionality on commodity cycles that are entirely different from its core gas business.<\/p>\n\n\n\n

Perhaps the most unexpected strategic development is the company’s entry into the data centre space through Sky47 Limited. Two Tier-III certified 5MW data centres are being developed in Islamabad and Karachi, with this segment expected to contribute approximately 8%<\/strong> to 10%<\/strong> to the bottom line once it reaches scalable utilisation. The company is also acquiring a 65%<\/strong> working interest and operatorship of the Peshawar Block and a 20%<\/strong> stake in the Eastern Offshore Block-C. Circular debt exposure is relatively contained, with only 45%<\/strong> of sales tied to gas utilities, which is lower than most peers in the E&P sector and reduces the risk of receivables accumulating into a structural problem. The dividend yield is anticipated at 2.9%<\/strong> to 3.2%<\/strong> for 2026, adding an income dimension to an otherwise growth-oriented thesis.<\/p>\n\n\n\n

Why it matters for long-term investors:<\/strong>\u00a0 MARI<\/a><\/strong>‘s sector-leading Reserve Replacement Ratio of 278%<\/strong>, combined with a controlled circular debt exposure of only 45%<\/strong> of sales tied to gas utilities, makes it the most defensively positioned E&P stock on the PSX. The expanding mandate into offshore exploration, mining, and data centres adds meaningful upside optionality without compromising the core business.<\/p>\n\n\n\n

1. MCB Bank Limited (MCB)<\/h2>\n\n\n\n

Expected Average 2027 EPS Growth Rate\u00a08.1%<\/strong><\/p>\n\n\n\n

A Pillar of Pakistani Banking With a Proven Track Record<\/h3>\n\n\n\n

MCB<\/a><\/strong> Bank has consistently been one of the most profitable commercial banks in Pakistan, and its first quarter results for 2026 reinforce that reputation firmly. For the three months ending March 2026, the bank reported a consolidated Profit After Tax of PKR 17.955 billion, translating into an Earnings Per Share of PKR 15.15 for the quarter. Alongside the results, the Board announced a first interim cash dividend of PKR 9.0 per share, reflecting both the confidence of management and the bank’s ability to deliver tangible returns to shareholders even in a transitioning interest rate environment.<\/p>\n\n\n\n

Total income for the quarter stood at PKR 51.674 billion, with Net Interest Income accounting for PKR 41.656 billion of that figure. The bank reported operating expenses of PKR 22.247 billion, with an effective tax rate of 46.7%<\/strong>. Importantly, the quarter saw a net reversal in provisions of PKR 892 million, a positive sign for asset quality. The infection ratio remained contained at 5.3%<\/strong>, covered by a robust coverage ratio of 92.5%<\/strong>, which provides a meaningful cushion against any future credit stress. The bank’s gross advances-to-deposit ratio of 35.8%<\/strong> reflects a deliberate and conservative lending posture, while the CASA ratio of 96.3% stands as the highest in the industry, underpinning the bank’s structural cost advantage across rate cycles.<\/p>\n\n\n\n

What Management Said in the April 2026 Briefing<\/h3>\n\n\n\n

The April 2026 corporate briefing revealed a management team with a clear and disciplined medium-term strategy. The most defining priority is a focused drive to grow zero-cost current account deposits, with a long-term ambition for current accounts to reach 60%<\/strong> of the total deposit mix. This is not a short-term target but a structural shift that would further reduce the bank’s cost of funds and protect its net interest margin even if rates move lower. At the same time, management is actively working to keep the cost-to-income ratio below 40%<\/strong>, which would place MCB<\/a><\/strong> among the most operationally efficient banks in the country.<\/p>\n\n\n\n

On the expansion front, the bank plans to open more than 40 new branches during 2026, with a focus on growing its conventional banking footprint to deepen its low-cost deposit base. Regarding its investment book, 75%<\/strong> of the PIB portfolio is now parked in variable-rate instruments, which positions the bank well if secondary market yields continue their upward trajectory. Management also communicated a view that the policy rate has likely bottomed out, and they are watching for potential rate hikes in the coming months. This positioning suggests the investment book has been deliberately structured to benefit from any such scenario.<\/p>\n\n\n\n

Why it matters for long-term investors:<\/strong>\u00a0MCB<\/a><\/strong>‘s 96.3%<\/strong> CASA ratio is the highest in the industry, which means the bank funds itself almost entirely through zero and low-cost deposits. This structural advantage protects net interest margins across interest rate cycles, making it one of the most resilient income-generating franchises available to investors on the PSX.<\/p>\n\n\n\n

Conclusion<\/h2>\n\n\n\n

Each of the five stocks covered in this report has a distinct investment narrative, but they share several common characteristics that make them suitable as long-term holdings on the PSX. They all generate significant and recurring cash flows, operate within sectors that are central to Pakistan’s economy, maintain strong balance sheets with meaningful capital buffers, and are led by management teams with clear and publicly communicated strategies for the years ahead. Whether the investment objective is income, growth, or a combination of both, these five names offer a coherent framework for building a portfolio that can compound wealth over time while managing the structural risks that come with investing in a frontier market.<\/p>\n\n\n\n

MCB<\/a><\/strong> and MEBL<\/a><\/strong> anchor the banking exposure through industry-leading CASA ratios, clean balance sheets, and returns on equity that are difficult to find elsewhere in the market. ENGROH<\/a><\/strong> provides diversified earnings exposure through its tower infrastructure growth story and a deep base of subsidiaries that are progressively returning to profitability. MARI<\/a><\/strong> offers a defensive energy holding with an extraordinary reserve replacement record and embedded optionality across offshore exploration, mining, and digital infrastructure. HUBC<\/a><\/strong> rounds out the portfolio as Pakistan’s largest Independent Power Producer, delivering sovereign-backed, dollar-indexed cash flows through Take-or-Pay agreements extending to 2053, while its strategic moves into EV infrastructure and BYD automotive manufacturing add meaningful long-term growth dimensions that are not yet reflected in the earnings base. For investors committed to the discipline of patient, quality-focused investing on the PSX, these five names represent some of the most compelling long-term opportunities available today.<\/p>\n","protected":false},"excerpt":{"rendered":"

Criteria: consistent dividend history, earnings resilience across cycles, dollar-linked or hard-asset revenue, strong ROE, and inflation-beating compounding potential over 3\u20135+ years. Introduction The Pakistan Stock Exchange has long rewarded investors who are willing to hold quality businesses through the inevitable cycles of macro volatility. In a market shaped by inflation, rupee depreciation, and shifting interest […]<\/p>\n","protected":false},"author":11,"featured_media":13178,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[382,33,182,61,28],"class_list":["post-13175","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-psx-blog","tag-engroh","tag-hubc","tag-mari","tag-mcb","tag-mebl"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2026\/07\/Copy-of-Article-Cover-7-940x445.jpg",940,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2026\/07\/Copy-of-Article-Cover-7-463x348.jpg",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2026\/07\/Copy-of-Article-Cover-7-300x251.jpg",300,251,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2026\/07\/Copy-of-Article-Cover-7.jpg",940,788,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/13175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=13175"}],"version-history":[{"count":3,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/13175\/revisions"}],"predecessor-version":[{"id":13179,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/13175\/revisions\/13179"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/13178"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=13175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=13175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=13175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}