Treet Battery Limited (hereafter referred to as “TBL” or “the Company”) was incorporated on February 22, 2019, as an unlisted public limited company under the Companies Ordinance 1984 (now Companies Act, 2017), and was subsequently listed on the Pakistan Stock Exchange (PSX) on December 15th, 2023. The registered office of the Company and its holding company is situated at 72-B, Industrial Area, Kot Lakhpat, Lahore.

Treet Battery Limited (TBL) represents the formal corporatization of the Treet Group’s battery division, which operates under the internationally recognized Daewoo brand license. Before its listing on the Pakistan Stock Exchange (PSX) in 2023, the battery business operated as a segment under First Treet Manufacturing Modaraba (FTMM). To streamline operations and unlock shareholder value, the battery undertaking, including all assets, liabilities, and operations, was demerged from FTMM and transferred to TBL, a new entity. This transition was executed under a formal Scheme of Arrangement, which received regulatory clearance and was sanctioned by the Honorable Lahore High Court. TBL is a key subsidiary of Treet Corporation Limited (TCL), a prominent and diversified conglomerate listed on the PSX. Since its independent listing, TBL has focused on scaling its production capabilities, specifically in the Maintenance-Free (MF) and Deep Cycle battery segments.

Treet Battery Limited is a specialized provider of advanced energy storage solutions, operating primarily under the Daewoo brand name. This licensing arrangement provides TBL with a significant competitive advantage, leveraging high consumer brand recall and a reputation for technological reliability within Pakistan’s automotive and renewable energy sectors. The Company’s operational model encompasses the entire value chain, including the manufacturing, assembly, and distribution of diverse battery technologies. Its portfolio is strategically diversified across lead-acid automotive and UPS backup requirements and expanding into advanced technologies like Lithium-Ion batteries, to capture the high-growth solar integration and industrial storage markets. The Company’s manufacturing facility is situated within the Faisalabad Industrial Estate Development and Management Company (FIEDMC) at Sahianwala Interchange. This location provides logistical advantages and access to industrial-grade infrastructure. The Company operates a high-precision and efficient Korean-engineered plant with a total installed capacity of 1.5 million units per annum in FY25 (FY24: 1.2 million). During FY25, the actual production volumes reached ~685k units (FY24: ~646k units), with an improved utilization of ~57% (FY24: ~53.9%). The facility also maintains ISO 9001 and ISO 14001 certifications.

Treet Corporation Limited (TCL), the parent company, owns a majority stake of ~86.18%, and Treet Holdings Limited owns a stake of ~1.81%. The remaining shares are held by the general public (~10.88%) and others (~1.13%).

TBL’s ownership structure is considered stable, as the controlling stake is held by Treet Corporation Limited, a well-established entity with over seven decades of presence across multiple industries.

Treet Corporation is a leading Pakistani conglomerate with a legacy spanning over 70 years. With decades of active engagement in multiple sectors, the parent company and its sponsoring family have consistently demonstrated strong business acumen. Their core strengths include a diversified business portfolio operating under the umbrella of several listed and public companies as subsidiaries or associated companies. The Group is dedicated to driving innovation and setting new benchmarks across various industries, including automotive, personal care, healthcare, packaging, and energy storage.

TBL derives financial strength from its affiliation with the Treet Group, a prominent and highly diversified industrial conglomerate in Pakistan. Being part of the Treet Group provides TBL with significant competitive advantages, including brand equity, synergies, and financial support, when needed. As of June 2025, the Group’s consolidated asset base stood at PKR 33 billion, reflecting a robust financial footprint across FMCG, Engineering, Healthcare, and specialized manufacturing. The Group’s financial resilience is underpinned by its strategic investments and a sophisticated network of related parties and subsidiaries.

The Company’s board is overseen by eight members: five non-executive directors (including the chairman), two independent directors, and one executive director who also serves as the CEO. This diverse composition ensures compliance with the corporate governance code.

All members of the Board of Directors (BoD) are seasoned professionals with extensive industry experience and long-standing affiliations with the company. The Chairman, Syed Shahid Ali (Non-Executive Director), is a seasoned executive with broad management experience and serves on the boards of Packages Limited, IGI Insurance Limited, and Treet Corporation Limited. He has driven organizational growth through strong leadership and remains active in social initiatives. The Board also includes independent directors, Dr. Haroon Latif Khan and Mr. Ahmed Shahid Hussain, who leverage their expertise and strategic insights to contribute to the company’s growth. Among the non-executive directors, Mr. Imran Azim brings over 40 years of experience across financial, asset management, and manufacturing sectors. He serves on multiple boards, including Treet Corporation Limited, Habib Asset Management Limited, Treet Holdings Limited, First Treet Manufacturing Modaraba, and Global Arts Limited. Mr. Muhammad Mohtashim Aftab has over 29 years of experience in financial strategy, business partnering, and revenue growth, with a distinguished career at KAPCO and AF Ferguson & Co. (PwC). He also contributes strategically to Renacon Pharma, Loads Limited, and Hi-Tech Alloy Wheels. Ms. Zunaira Dar brings over 10 years of legal and corporate governance experience and serves as Group Head Legal and Company Secretary at Treet Corporation Limited. She holds an LLB (Hons) from the University of London and has previously worked with Irfan & Irfan, Panasian Group, and AkzoNobel. Mr. Mohammad Majid Munir is an expert in investment banking, M&A, private equity, and corporate strategy. He holds an MBA in Finance from LUMS and a BSc in Finance and International Business from NYU Stern. His career includes roles at Credit Suisse, Arthur D. Little, and Bank Alfalah, and he currently serves as Senior Independent Director at EPL. Together, the Board’s diverse professional backgrounds and extensive expertise strengthen its governance and strategic decision-making.

The board of TBL has established two key committees: the Audit Committee and the HR & Remuneration Committee. Each of these is chaired by an independent director, ensuring impartial oversight and robust governance. During the year, multiple board meetings were held. Attendance of board members in these meetings remained strong.

M/s Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants, which are classified in category ‘A’ by SBP with satisfactory QCR rating, are the external auditors of the Company. The firm has expressed an unqualified opinion on the financial statements for the year ended June, 2025.

The Company has a clearly defined organizational structure, comprising functional and administrative departments, each with a multilayered hierarchy, and is led by a qualified department head. At present, all key positions within the organization are fully staffed.

The management team comprises highly qualified professionals with extensive experience and long-standing associations with the Company. Syed Sheharyar Ali, the CEO, is a dynamic leader with a strong focus on the automotive sector. He began his career at Treet Corporation Limited in 2001, becoming one of its youngest directors. Holding a BBA in Sales and Marketing Operations from Saint Louis University, USA, he is known for his forward-thinking leadership and commitment to continuous improvement. Muhammad Rizwan Qaiser, the CFO, brings over 15 years of experience in financial strategy, business turnarounds, and operational efficiency across local and international markets. Formerly CFO at Descon Oxychem, he led a company turnaround and managed major transactions, including a USD 2 billion CPEC project and a PKR 70 billion financing deal. At Treet Battery, he focuses on working capital optimization, performance improvement, and long-term growth. He holds an MBA from LUMS and a Bachelor’s degree from IBA Karachi. Shoaib Zafar, COO, oversees manufacturing, quality, R&D, and commercial operations. With over 18 years of experience, including senior roles at Unilever, he drives operational transformation, improving plant reliability, output, and efficiency. He holds a Mechanical Engineering degree from UET Lahore and is a certified TPM instructor and continuous improvement leader. This leadership team is supported by a group of experienced professionals, ensuring strong governance and strategic direction.

The Company has established clear reporting lines, supported by a Management Committee comprising all department chiefs and directors. The committee meets regularly, as needed, to review and discuss key operational and strategic matters, ensuring coordinated decision-making and effective execution across the organization.

TBL has implemented Oracle EBS R12, ensuring compliance with global standards for enterprise management systems. It is an integrated enterprise system supporting finance, supply chain, manufacturing, HR, and CRM. It provides real-time insights, streamlined workflows, and global compliance for efficient decision-making across the organization.

A detailed Management Information System (MIS), featuring key performance indicators, is submitted to the CEO on a monthly basis, including an income statement, segment-wise and region-wise breakdowns of revenue and profit, efficiency variance reports, as well as receivables, payables, and inventory aging reports, and an operational expenditure summary. Big 4 is the outsourced internal auditor of the Company. In addition to that, the Company has carved out a distinct presence in the market by being recognized as a premium brand, renowned for its unwavering reliability, and a cutting-edge manufacturing facility, which is ISO 9001 & 14001 certified.

The global battery market, estimated at over ~USD 100bn in 2025, is undergoing a structural shift from traditional lead-acid (growing ~3%) toward faster-growing lithium-ion technologies, driven by electric vehicles, renewable energy integration, and energy storage expansion, creating a dual-speed dynamic between stable legacy segments and high-growth new chemistries. In Pakistan, the battery market is relatively smaller (~USD 1.2–1.3bn in 2025–26), still dominated by lead-acid, with lithium-ion emerging (~USD 400mn, ~14% CAGR). Within the automotive segment, lead-acid batteries continue to be the standard for Starting, Lighting, and Ignition (SLI) applications, supported by the large domestic internal combustion engine fleet and, even in EVs, by auxiliary battery requirements driven by cost advantages and a well-established recycling ecosystem. Within this segment, MF batteries are gaining traction over conventional flooded variants, driven by consumer preference for convenience, lower maintenance (no water topping), and reduced corrosion risks; early movers in MF technology have benefited from this shift. However, despite the superior lifecycle and efficiency offered by lithium-ion and MF technologies, broader adoption remains constrained by a significant upfront price premium and the prevalence of an informal ecosystem of unorganized technicians and recyclers, which continues to reinforce demand for lower-cost conventional alternatives.

The local market is broadly segmented into automotive (OEM and replacement), backup power (household UPS and industrial), and a growing solar-linked storage segment. Demand is anchored by (i) automotive growth and vehicle parc expansion sustaining OEM and aftermarket demand, (ii) persistent reliance on backup power due to grid instability across households and industries, and (iii) rising solar adoption amid high electricity tariffs, increasingly favoring lithium-ion for its superior lifecycle economics. The replacement segment remains the largest contributor, given the short 2 to 3-year life of lead-acid batteries, ensuring recurring demand. Recent macroeconomic stabilization, through easing inflation, improving interest rates, recovering auto sales, and softer global commodity prices, has supported demand normalization and improved affordability, particularly for lithium-ion. Going forward, the market is expected to evolve into a hybrid structure, where lead-acid retains dominance in cost-sensitive automotive and UPS segments due to entrenched recycling and distribution advantages, while lithium-ion gains traction in solar, commercial & industrial storage, and emerging applications such as consumer electronics and light mobility.

The domestic battery landscape is characterized by a concentrated group of established players. Within this framework, the Company has successfully carved out a meaningful niche by leveraging its first-mover advantage in MF and Deep-Cycle technologies. Based on management’s representation, the Company commands an estimated ~7% market share within the organized sector (excluding the motorbike segment). A critical pillar of TBL’s market positioning is its successful integration into the primary automotive supply chain. The Company has secured strategic partnerships with leading Automobile OEMs operating in Pakistan to supply its premium MF batteries as original equipment, supporting its market expansion and reinforcing its competitive positioning in the automotive sector.

Following its demerger from FTMM in 2023, TBL underwent an aggressive expansion phase. The Company reported net sales of PKR 8,844mln in FY25, maintaining stability relative to FY24 (PKR 8,733mln) and marking a transformative ~333% increase from the FY23 base of PKR 2,041mln. The exponential growth between 2023 and 2025 primarily reflects a base effect following the successful transition of the battery undertaking into a standalone, listed corporate entity. The subsequent stabilization in FY25 indicates that the business has moved past its initial ramp-up phase and is now consolidating its market position. For the first half of FY26, the Company recorded sales of PKR 3,521mln, representing a ~20.4% year-on-year decline. This contraction is attributed to a cyclical dip in demand for backup power solutions (UPS and Solar) during the winter months. Notably, the battery industry remains highly sensitive to weather patterns and the reliability of the national grid, leading to periodic fluctuations in replacement cycles.

TBL has demonstrated a notable recovery in its core profitability. After a transitional FY24, the Company’s gross margin stabilized at ~20% in FY25 (FY24: ~19.8%), supported by improved raw material procurement, better capacity utilization, and solarization initiatives. This recovery is more pronounced at the operating margin level, which improved to ~11% in FY25 (FY24: ~9.8%), reflecting enhanced control over administrative and selling expenses. A key highlight of FY25 is the return to a positive bottom line, with a net profit margin of ~0.5%, a significant reversal from the ~4.3% net loss in FY24. The upward trajectory gained momentum in 1HFY26, driven by strategic cost-effectiveness, optimized lead sourcing, and reduced finance cost. Gross margin improved further to ~22.2%, operating margin stood at ~8.2%, and net profit margin was maintained at ~0.6% in 1HFY26..

TBL’s sustainability is underpinned by its continued focus on premium product offerings and its strategic alignment with Pakistan’s evolving energy landscape, particularly the shift toward solar and energy storage solutions. The Company’s positioning is further strengthened by the institutional backing of the Treet Group, which provides financial support, operational synergies, and strategic direction. Moreover, TBL’s investments in technological advancement, quality control, and partnerships with leading international players enhance its competitive resilience and support long-term scalability. Its integration into key OEM supply chains and exposure to high-growth segments, such as automotive and solar energy storage, further reinforces its sustainability profile by ensuring diversified and recurring demand streams. Recognizing the global and domestic shift toward advanced energy storage, TBL has recently entered into a strategic partnership with Highstar Digital Energy Technology (Guangdong) Co., Ltd., a premier Chinese manufacturer. This collaboration positions TBL to lead the import and domestic distribution of Lithium-Ion (Li-ion) battery solutions, significantly diversifying its existing portfolio of MF and Deep Cycle lead-acid batteries. TBL’s move into the Li-ion space is a proactive response to two critical market drivers: Net Metering Transitions and Rising Energy Costs. To ensure its long-term sustainability, the Company also establishes the targets through financial projections, meticulous budgeting plans, and proactive forecasting of procurement requirements. The assigned ratings also incorporate a forward-looking view of the Company’s growth trajectory. A primary credit driver is the projected expansion of the top-line and the gradual improvement in the profitability, as detailed in the shared financial projections.

During FY25, TBL maintained a disciplined approach to its operating cycle. The net working capital cycle saw a marginal improvement, shortening to ~53 days (FY24: ~55 days). This efficiency was primarily driven by a reduction in the gross working capital cycle, which improved to ~67 days (FY24: ~71 days). The Company’s receivables management is considered good, with the average collection period remaining stable and lean at ~17 days (FY24: ~18 days). In the first half of FY26, the working capital dynamics shifted significantly, with the net and gross cycles lengthening to ~73 days and ~94 days, respectively. This extension is a direct consequence of a spike in inventory days, which rose to ~66 days (FY25: ~49 days). This inventory build-up is a deliberate strategic move to prepare for the peak demand period for high-value backup power solutions (UPS and Solar), which traditionally accelerates in the second half of the financial year.

The Company has demonstrated a gradual improvement in its ability to service financial obligations. The EBITDA-to-finance cost ratio progressed from 0.7x in FY23 to 1.0x in FY24 and 1.3x in FY25, with a further step-up to 1.9x in 1HFY26. However, this improvement is predominantly policy rate-driven, total finance cost declined from PKR 1,265mln in FY24 to PKR 921mln in FY25 and further to PKR 261mln in the six-month period ending Dec-25, reflecting the impact of monetary policy easing rather than a structural improvement in earnings. FCFO similarly stood at PKR 375mln in 1HFY26, implying annualized generation of ~PKR 750mln, materially below the PKR 1,042mln recorded in FY25, driven by significant working capital consumption of PKR 1,503mln during the period. The core coverage ratio improved to 0.9x in 1HFY26 from 0.4x in both FY25 and FY24, which indicates that free cash flows, even under a low-rate environment, do not fully cover total debt service obligations. The Debt Payback Ratio stood at 17.8x as of Dec-25. Sustained coverage improvement is contingent on continued monetary easing and normalization of working capital cycles, rather than any step-change in core profitability.

The Company’s capital structure remains leveraged, albeit on a gradual deleveraging path. The leverage ratio improved to ~73.9% as of Dec-25, compared to a peak of ~98.3% in FY24, primarily driven by the conversion of ~PKR 2,003mln of related-party debt into ordinary share capital during FY25, which strengthened headline equity metrics. Despite this improvement, absolute indebtedness increased to PKR 6,221 million as of Dec-25 from PKR 5,546 million at Jun-25, largely due to additional short-term borrowings to support working capital requirements. This indicates that while leverage ratios have improved, underlying debt levels have continued to rise. Related-party borrowings, amounting to PKR 3,822mln, constitute a significant ~61.4% of total debt. While such funding provides a degree of financial flexibility, it also introduces concentration and refinancing risk, particularly in the absence of clearly defined terms, maturities, and rollover arrangements. Short-term borrowings stand at PKR 2,399 million, representing ~38.6% of the total debt profile. Going forward, sustained deleveraging will hinge on consistent profitability, prudent working capital management, and a more structured approach toward managing and gradually rationalizing related-party exposures.