{"id":9741,"date":"2025-07-11T21:51:19","date_gmt":"2025-07-11T16:51:19","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=9741"},"modified":"2025-07-11T21:51:24","modified_gmt":"2025-07-11T16:51:24","slug":"these-5-could-soar-in-fy26-according-to-arif-habib-limited","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/these-5-could-soar-in-fy26-according-to-arif-habib-limited\/","title":{"rendered":"These 5 Could Soar in FY26 according to Arif Habib Limited"},"content":{"rendered":"\n

As FY26 kicks off, investors are already asking the big question: Where will the market\u2019s next big returns come from?<\/em> Arif Habib Limited (AHL), one of Pakistan\u2019s leading brokerage houses, has crunched the numbers and published its outlook on stocks with the highest total return potential for the year ahead. Total return includes both price appreciation and dividend payouts, giving a more complete picture of expected investor gains.<\/p>\n\n\n\n

While the broader market outlook remains cautiously optimistic, AHL\u2019s top picks show a remarkable concentration in sectors that are often overlooked or misunderstood by retail investors. The upside potential in some of these names isn\u2019t just impressive\u2014it\u2019s extraordinary.<\/p>\n\n\n\n

Here are the five stocks AHL believes could deliver the highest total returns in FY26.<\/p>\n\n\n\n

5. Meezan Bank Ltd (MEBL)<\/h2>\n\n\n
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\"MEBL<\/figure>\n<\/div>\n\n\n

Meezan Bank, the pioneer of Islamic banking in Pakistan, continues to outperform its peers through disciplined risk management, efficient cost control, and sector leadership. It has become a cornerstone holding for investors seeking both profitability and Shariah compliance.<\/p>\n\n\n\n

Recent Performance<\/h3>\n\n\n\n

Over the past five years, Meezan has delivered an impressive average return on equity of approximately 42 percent<\/strong>, consistently placing it at the top of the banking sector. Its deposit profile is exceptionally strong, with 50 percent of deposits held in current accounts<\/strong>, helping keep its cost of deposits at just 3.4 percent<\/strong> for CY25.<\/p>\n\n\n\n

The bank maintains a conservative lending strategy, reflected in a low infection ratio of 2 percent<\/strong> and a strong coverage ratio of 160 percent<\/strong>. These risk controls have enabled it to weather economic volatility while maintaining healthy earnings.<\/p>\n\n\n\n

Meezan topped industry profitability rankings in both CY23 and CY24 and is expected to continue its strong performance with projected earnings of PKR 47.5 per share in CY25<\/strong> and PKR 53.4 in CY26<\/strong>.<\/p>\n\n\n\n

Backed by a capital adequacy ratio of around 19.5 percent<\/strong>, the bank is financially well-positioned to continue rewarding shareholders even as earnings growth moderates.<\/p>\n\n\n\n

Price Target and Return Potential<\/h3>\n\n\n\n

Arif Habib Limited assigns MEBL a June 2026 target price of PKR 455.6<\/strong>, translating to a total return of 36 percent<\/strong> from current levels. This includes a projected dividend of PKR 30 per share in FY26<\/strong>, offering investors a solid combination of income and moderate capital appreciation. For those seeking long-term exposure to a stable, Shariah-compliant bank with consistent performance, MEBL remains a compelling choice.<\/p>\n\n\n\n\n\n\n\n

4. Oil & Gas Development Company Ltd (OGDC)<\/h2>\n\n\n
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\"\"<\/figure>\n<\/div>\n\n\n

OGDC remains one of the most attractive energy plays on the PSX, combining strong fundamentals, steady production growth, and undervalued financial metrics. For investors looking at long-term energy exposure, OGDC offers both upside potential and dependable dividend income.<\/p>\n\n\n\n

Recent Performance<\/h3>\n\n\n\n

The company is on track to increase production through the development of new fields and optimization of mature assets. Output from Spinwam<\/strong> (569 barrels per day of condensate and 127 mmcfd of gas) and the early processing facility at Shewa<\/strong>, expected to come online in March 2025<\/strong>, will drive near-term volume growth. These additions come alongside efforts to enhance production efficiency at legacy fields.<\/p>\n\n\n\n

OGDC\u2019s balance sheet is exceptionally strong. It holds PKR 236 billion in cash<\/strong>, or around PKR 55 per share<\/strong>, giving it substantial room to increase dividends and pursue offshore investment opportunities. The company is also exploring high-impact discoveries<\/strong> in Abu Dhabi and Waziristan<\/strong>, which could serve as major earnings catalysts if successful.<\/p>\n\n\n\n

Another key development to watch is the potential sale of a stake in the Reko Diq project<\/strong>, which could unlock further value and improve capital allocation flexibility.<\/p>\n\n\n\n

Financially, OGDC remains highly profitable, with net margins above 42 percent<\/strong> and a low price-to-earnings multiple of 5.63x<\/strong> for FY26. The price-to-book ratio of 0.68x<\/strong> underscores how undervalued the stock remains relative to its asset base.<\/p>\n\n\n\n

Price Target and Return Potential<\/h3>\n\n\n\n

Arif Habib Limited has set a June 2026 target price of PKR 311.7<\/strong> for OGDC, implying a total return of 43.8 percent<\/strong>. This includes a projected dividend payout of PKR 20 per share in FY26<\/strong>, giving the stock an estimated yield of 8.8 percent<\/strong>. With new production, strong cash reserves, and optionality from both exploration and asset sales, OGDC offers a compelling mix of value and upside for FY26.<\/p>\n\n\n\n\n\n\n\n

3. Fauji Cement Company Ltd (FCCL)<\/h2>\n\n\n
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\"\"<\/figure>\n<\/div>\n\n\n

Fauji Cement is emerging as one of the most operationally efficient players in Pakistan\u2019s cement industry. With investments in alternative energy, lower input costs, and a growing focus on backward integration, FCCL is well positioned to deliver record earnings in FY26.<\/p>\n\n\n\n

Recent Performance<\/h3>\n\n\n\n

FCCL is projected to report earnings of PKR 6.6 per share in FY26<\/strong>, the highest in its history. This earnings growth is supported by volume expansion<\/strong>, ongoing cost-saving initiatives<\/strong>, and a significant reduction in finance costs<\/strong>.<\/p>\n\n\n\n

One of the biggest drivers of margin improvement is energy efficiency. The company has expanded its solar power capacity to 67.5 MW<\/strong>, helping reduce average power costs by 22 percent<\/strong> in 9MFY25. On the fuel side, FCCL\u2019s strategic shift toward 59 percent local coal<\/strong> and 10 percent alternative fuels<\/strong> has cut fuel costs by 16 percent<\/strong>, significantly boosting profitability.<\/p>\n\n\n\n

Looking ahead, FCCL is planning to invest PKR 1.0 billion<\/strong> in a polypropylene (PP) bag plant<\/strong> to localize up to 90 percent of its packaging<\/strong>, further reducing reliance on external suppliers and tightening cost control.<\/p>\n\n\n\n

Gross margins are expected to expand to 34.4 percent in FY26<\/strong>, while the company maintains a healthy balance sheet and reinvests for operational efficiency.<\/p>\n\n\n\n

Price Target and Return Potential<\/h3>\n\n\n\n

Arif Habib Limited assigns a June 2026 target price of PKR 66<\/strong> for FCCL, offering a total return of 47.1 percent<\/strong> from current levels. This includes an expected dividend payout of PKR 2 per share<\/strong>, translating to a yield of 4.36 percent<\/strong>. For investors looking for growth driven by cost efficiency and smart capital allocation, FCCL offers a strong case heading into FY26.<\/p>\n\n\n\n\n\n\n\n

2. Pakistan Petroleum Ltd (PPL)<\/h2>\n\n\n
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\"\"<\/figure>\n<\/div>\n\n\n

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.<\/p>\n\n\n\n

Recent Performance<\/h3>\n\n\n\n

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

Exploration remains a central growth pillar. The company\u2019s well in Abu Dhabi<\/strong> 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<\/strong>, a move that positions it for long-term reserve growth and production sustainability.<\/p>\n\n\n\n

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

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

Price Target and Return Potential<\/h3>\n\n\n\n

Arif Habib Limited estimates a June 2026 target price of PKR 239.7<\/strong> for PPL, translating to a total return of 49.4 percent<\/strong>. This includes an expected FY26 dividend of PKR 12 per share<\/strong>, offering a dividend yield of 6.96 percent<\/strong>. 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.<\/p>\n\n\n\n\n\n\n\n

1. Air Link Communication Ltd (AIRLINK)<\/h2>\n\n\n
\n
\"AIRLINK\"<\/figure>\n<\/div>\n\n\n

Air Link has rapidly evolved from a smartphone distributor into one of Pakistan\u2019s most dynamic technology companies. With strong earnings growth ahead, expanding product lines, and a strategic push toward exports, Air Link leads AHL\u2019s list with the highest total return potential for FY26.<\/p>\n\n\n\n

Recent Performance<\/h3>\n\n\n\n

Rising affordability, higher smartphone penetration, and a growing population are fueling domestic demand, giving Air Link a solid tailwind. But the real story lies in what comes next.<\/p>\n\n\n\n

The company has expanded its local assembly capabilities<\/strong>, including the production of Xiaomi TVs<\/strong>, which adds a new revenue stream and diversifies its product mix beyond smartphones.<\/p>\n\n\n\n

Looking ahead to FY26, Air Link plans to export one million mobile phone units<\/strong>, with shipments expected to begin within the year. This new export vertical is projected to lift FY26 earnings to PKR 26.2 per share<\/strong>, positioning the company for outsized growth.<\/p>\n\n\n\n

With a 4-year forward earnings CAGR of 39 percent<\/strong>, Air Link is firmly in growth-stock territory. At the same time, it remains undervalued<\/strong>, trading at a forward PE of just 5.9x for FY26<\/strong> and 4.5x for FY27<\/strong>, compared to its 3-year historical average of 8.7x.<\/p>\n\n\n\n

Margins are also set to expand, with net margins expected to rise to 5.03 percent<\/strong> in FY26, up from just 3.39 percent the previous year.<\/p>\n\n\n\n

Price Target and Return Potential<\/h3>\n\n\n\n

Arif Habib Limited has set a June 2026 target price of PKR 263.3<\/strong> for Air Link, implying a total return of 78.7 percent<\/strong>, the highest in the top five. This includes a projected dividend of PKR 10.5 per share<\/strong>, giving the stock a dividend yield of nearly 7 percent<\/strong>. With aggressive expansion, strong earnings momentum, and favorable valuation, Air Link stands out as the most exciting opportunity among AHL\u2019s top FY26 picks.<\/p>\n","protected":false},"excerpt":{"rendered":"

Arif Habib Limited (AHL), one of Pakistan\u2019s leading brokerage houses, has crunched the numbers and published its outlook on stocks with the highest total return potential<\/p>\n","protected":false},"author":4,"featured_media":9745,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[41,28,67,201],"class_list":["post-9741","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-psx-blog","tag-fccl","tag-mebl","tag-ogdc","tag-ppl"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/07\/Top-X-Stocks-1140x445.jpg",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/07\/Top-X-Stocks-463x348.jpg",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/07\/Top-X-Stocks-300x188.jpg",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/07\/Top-X-Stocks.jpg",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9741","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\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=9741"}],"version-history":[{"count":3,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9741\/revisions"}],"predecessor-version":[{"id":9746,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9741\/revisions\/9746"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/9745"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=9741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=9741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=9741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}