{"id":9525,"date":"2025-06-10T13:50:11","date_gmt":"2025-06-10T08:50:11","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=9525"},"modified":"2025-06-10T13:50:15","modified_gmt":"2025-06-10T08:50:15","slug":"sngp-posts-80-profit-growth-should-investors-take-notice","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/sngp-posts-80-profit-growth-should-investors-take-notice\/","title":{"rendered":"SNGP posts 80% profit growth, should investors take notice?"},"content":{"rendered":"\n

Sui Northern Gas Pipelines Ltd (SNGP<\/a>)<\/strong> is once again drawing attention from Pakistan\u2019s investor community. Following a strong financial performance in FY24, the company appears poised for a new growth phase, driven by operational efficiency, network expansion, and favorable policy tailwinds. But is the stock worth your money today?<\/p>\n\n\n\n

Let\u2019s take a closer look.<\/p>\n\n\n\n

Profits surge by 80% in FY24<\/h2>\n\n\n\n

SNGP reported PKR 19 billion in net profit<\/strong> for FY24, up 80% year-on-year<\/strong>, translating to EPS of PKR 29.9<\/strong>. This impressive growth was supported by:<\/p>\n\n\n\n

    \n
  • Higher gas volumes sold (up 1% YoY to 1,683 mmcfd)<\/li>\n\n\n\n
  • Increased prescribed prices over the year<\/li>\n\n\n\n
  • Better operational control, with UFG (Unaccounted-for Gas)<\/strong> dropping to 4.93%<\/strong>, an 18-year low<\/li>\n<\/ul>\n\n\n\n

    Such profitability momentum gives investors a reason to take note.<\/p>\n\n\n\n

    Revenue crosses PKR 1.5 trillion<\/h2>\n\n\n\n

    SNGP posted revenues of PKR 1.53 trillion<\/strong>, including Tariff Differential Subsidy (TDS), reflecting a 12% YoY increase<\/strong>. With higher sales volumes and favorable pricing, the company has built a strong foundation for future revenue consistency.<\/p>\n\n\n\n

    Dividend outlook: calculating the yield<\/h2>\n\n\n\n

    Assuming a 40% payout ratio (conservative for a utility), the estimated dividend per share for FY24 could be ~PKR 12<\/strong>. With the stock trading around PKR 100<\/strong>, that would translate to a dividend yield of approximately 12%<\/strong>, well above market averages.<\/p>\n\n\n\n

    Future growth plans signal upside<\/h2>\n\n\n\n

    SNGP is not just sitting on profits. The company is investing ~PKR 30 billion annually<\/strong> in capital expenditure. Ongoing and upcoming projects include:<\/p>\n\n\n\n

      \n
    • Kot Palak Pipeline<\/strong> (45 mmcfd capacity)<\/li>\n\n\n\n
    • Pipeline upgrades in Islamabad and Rawalpindi<\/strong><\/li>\n\n\n\n
    • Expansion into EPC services<\/strong>, having completed projects for SSGC and Parco Gunvor<\/li>\n<\/ul>\n\n\n\n

      The focus on infrastructure enhancement and service diversification adds strength to the long-term investment thesis.<\/p>\n\n\n\n

      Positive policy and regulatory developments<\/h2>\n\n\n\n

      The government has appointed KPMG to resolve gas circular debt<\/strong>, and price hikes are slowing down its accumulation. Recoveries from power plants using RLNG have improved, helping to stabilize SNGP\u2019s cash flows.<\/p>\n\n\n\n

      These macro-level tailwinds reduce investor risk and boost long-term visibility.<\/p>\n\n\n\n

      Is SNGP worth buying?<\/h2>\n\n\n\n

      Yes, if you\u2019re looking for a mix of income and stability.<\/strong> Here\u2019s why:<\/p>\n\n\n\n

        \n
      • Strong earnings growth and improving margins<\/li>\n\n\n\n
      • Attractive dividend yield (~12%)<\/li>\n\n\n\n
      • Ongoing network expansion and EPC diversification<\/li>\n\n\n\n
      • Policy support for circular debt resolution and gas price stabilization<\/li>\n<\/ul>\n\n\n\n

        Risks to watch<\/strong> include regulatory delays and reduced demand from captive power users due to levy uncertainties. However, SNGP\u2019s proactive management and solid fundamentals help mitigate those concerns.<\/p>\n\n\n\n

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

        SNGP has entered FY25 on solid footing. Its profitability, dividend strength, and clear growth trajectory make it one of the more promising utilities on the PSX. For long-term investors seeking consistent returns with modest risk, SNGP deserves a closer look<\/strong>.<\/p>\n\n\n\n

        Source: AKD Securities<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

        Sui Northern Gas Pipelines Ltd (SNGP) is once again drawing attention from Pakistan\u2019s investor community. Following a strong financial performance in FY24, the company appears poised for a new growth phase, driven by operational efficiency, network expansion, and favorable policy tailwinds. But is the stock worth your money today?<\/p>\n","protected":false},"author":9252,"featured_media":7000,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,155],"tags":[224],"class_list":["post-9525","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-fundamental-analysis","tag-sngp"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SNGP-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SNGP-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SNGP-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SNGP-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9525","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\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=9525"}],"version-history":[{"count":2,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9525\/revisions"}],"predecessor-version":[{"id":9532,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9525\/revisions\/9532"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/7000"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=9525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=9525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=9525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}