Pak Elektron Limited ('PEL' or 'the Company'] was incorporated under the repealed Companies Act, 1913 on 03 March 1956. The Company is a Public Company Limited by Shares and is listed on Pakistan Stock Exchange Limited. The principal activity of the Company is manufacturing and sale of electrical capital goods and domestic appliances. The Company's registerd office is located in 10-G, Mushtaq Ahmed Gurmani Road, Gulberg - II, Lahore, Pakistan.

Pak Elektron Limited (PEL) was incorporated in 1956 and has since become a prominent name in the manufacturing of electrical appliances. In 1978, the Saigol Group acquired a majority stake in the Company, transforming PEL into the flagship entity of the group. In a strategic move to streamline its operations, the Board of PEL and its wholly owned subsidiary, PEL Marketing (Private) Limited (PMPL), approved a scheme of arrangement for the amalgamation of PMPL into PEL. This merger, which took effect on April 30, 2020, was aimed at enhancing operational efficiencies and strengthening the Company's market position.

PEL is engaged in the manufacturing, assembly, and sale of electrical capital goods and a diverse portfolio of domestic home appliances. The Company operates through two primary business divisions: the Appliances Division and the Power Division. The Appliances Division manufactures, assembles, and markets a broad range of consumer products, including refrigerators, deep freezers, air conditioners, microwave ovens, LED televisions, washing machines, water dispensers, and other household appliances. The Power Division specializes in the manufacturing and sale of electrical equipment such as transformers, switchgears, and energy meters, while also providing Engineering, Procurement, and Construction (EPC) contracting services for power infrastructure projects. Through its emphasis on product innovation, quality, and operational excellence, PEL has established a strong presence in both Pakistan's consumer appliance market and the electrical power equipment industry.

The Saigol Group owns approximately ~27.86% of the Company's shareholding, primarily through family members, with Mr. Naseem Saigol holding the majority stake at ~23.58%. The remaining shareholding is distributed as follows: ~1.09% held by insurance companies, ~7.74% by financial institutions, ~11.37% by joint stock companies, ~4.83% by modarabas and mutual funds, and ~10% by other entities. The general public holds the largest portion, accounting for ~36.9%.

The ownership of the business is considered stable, as Saigol Group owns ~27.86% of the Company's shareholding, primarily through family members, with Mr. Naseem Saigol holding the majority stake at ~23.58%.. This strong familial stake provides a solid foundation for the Company’s long-term strategic direction and continuity.

Saigol Group is one of Pakistan's leading industrial conglomerates, with diverse interests spanning across services, manufacturing of home appliances and electrical equipment, textiles, and power generation. The group’s wideranging portfolio reflects its strong presence in key sectors of the economy, driving innovation and growth across various industries.

The Group maintains a strong business profile, supported by its diversified operations across Pakistan's textile, engineering, and energy sectors. Its established market position, broad product portfolio, and long-standing industry presence provide multiple revenue streams and reduce reliance on any single business segment. This diversification, coupled with extensive operational experience and strong brand recognition, enhances the Group's resilience to sector-specific challenges and strengthens its competitive position.

The Company's Board of Directors consists of eight members, including the Chairman, three executive directors, three non-executive directors, and one independent director. The Board reflects a strong presence from the Saigol Group, with three members (the Chairman and two executive directors) affiliated with the group. Additionally, one independent director is nominated by the National Bank of Pakistan (NBP).

The Board of Directors comprises a diverse mix of experienced professionals with extensive expertise in business leadership, finance, corporate governance, and industry. The Board is chaired by Mr. Naseem Saigol, who serves on the boards of several companies within the Saigol Group and has held prominent leadership positions in various trade and industry associations. Mr. M. Murad Saigol, Chief Executive Officer, also serves as a director across multiple group entities and brings decades of executive management experience in the engineering and consumer durables sectors. The Board is further strengthened by Mr. M. Kamran Saleem, who contributes extensive expertise in finance, accounting, corporate law, and governance; and Mr. Javed Siddiqu, the nominee director by NBP. Collectively, the Board's diverse professional backgrounds and governance expertise provide effective strategic oversight, support sound decision-making, and reinforce the Company's long-term corporate governance framework.

The Board exercises oversight through two key committees: the Audit Committee and the Human Resource & Remuneration Committee.

M/S Rahman Sarfaraz Rahim Iqbal Rafiq & Co., Chartered Accountants, classified as category ‘A’ by the SBP with a satisfactory QCR rating, serve as the Company's external auditors. The firm has issued an unqualified opinion on PEL’s financial statements for the year ended December 31, 2025.

The Company has a well-defined organizational structure aligned with its two primary divisions –Home Appliances and Power. Each division is supported by distinct departments covering the following functions: i) Production, ii) Quality Control, iii) Research and Development, iv) Marketing, v) Supply Chain, and vi) Planning. Meanwhile, the Finance, IT, Human Resources, and Internal Audit departments operate as shared services across both divisions.

The Company's management team comprises experienced professionals with extensive industry knowledge and technical expertise, providing strong strategic and operational leadership. The Company is led by Mr. Murad Saigol, who has served as Chief Executive Officer since 2005 and has played a pivotal role in driving the Company's long-term growth and expansion. He is supported by Mr. Zeid Yousuf Saigol, Director of Operations – Power Division, who oversees the Company's power business and operational activities. The senior management team also includes Mr. Syed Manzar Hassan, Chief Financial Officer, a Fellow Chartered Accountant (FCA) of the Institute of Chartered Accountants of Pakistan (ICAP), who brings extensive expertise in finance, corporate governance, strategic planning, and financial management. Collectively, the management team's experience and continuity strengthen the Company's operational capabilities and support the effective execution of its strategic objectives.

Management meets on an as-needed basis to discuss the Company's operational matters. However, given the size and complexity of the Company’s operations, there is a need for formal management committees to enhance effectiveness and decision-making. This presents an opportunity for further improvement.

PEL has implemented various modules of the Oracle E-Business Suite to address the diverse operational and accounting needs of the Company. Oracle Financials and Oracle Supply Chain manage procurement, inventory, and order booking processes, while Oracle Discrete Manufacturing has been deployed in both divisions. Additionally, a customized software solution for HR and payroll management has also been implemented.

To ensure operational efficiency, the Company has established a robust internal audit function that conducts regular reviews of operations and processes. The internal audit team is responsible for identifying potential risks, ensuring compliance with internal policies, and recommending improvements to enhance overall performance and controls. This proactive approach helps the Company maintain high standards of governance and operational effectiveness.

The global household appliances industry continues to expand, driven by rising demand for energy efficient, smart, and technologically advanced products. Manufacturing remains concentrated in China and other East Asian economies, with Chinese manufacturers benefiting from significant scale and cost advantages that continue to intensify competition in export markets. In the power equipment segment, long term demand remains supported by grid expansion, renewable energy integration, urbanization, and electrification initiatives, particularly across Asia Pacific.

The domestic operating environment improved considerably during CY25, creating supportive conditions for both the household appliances and power equipment sectors. Pakistan's economic recovery gained momentum, supported by higher GDP growth, a sharp decline in inflation, easing interest rates, and a largely stable exchange rate. Lower financing costs improved consumer affordability and business confidence, while stable currency conditions contained the impact of imported component costs on manufacturers. Rising per capita income further supported purchasing power, particularly in urban areas, contributing to a gradual recovery in discretionary spending.

The operating environment, however, began to shift during 1QCY26. Escalating geopolitical tensions disrupted global supply chains and increased international freight costs, exerting upward pressure on imported raw material prices. At the same time, inflationary pressures began to re emerge, prompting the State Bank of Pakistan to reverse part of its monetary easing cycle through an increase in the policy rate. While these developments introduce uncertainty for manufacturers through higher procurement and financing costs, the overall impact has remained manageable.

Against this backdrop, Pakistan's household appliances industry demonstrated a strong recovery during CY25, with industry revenues more than doubling over the past two years, supported by improving macroeconomic fundamentals and recovering consumer demand. Major appliance production also recorded growth, while the electrical equipment segment returned to expansion following the contraction witnessed in the preceding year. Demand continues to be supported by urbanization, housing activity, rising disposable incomes, technological advancements, and the increasing perception of household appliances as essential consumer products. Consumer financing remains an important demand driver, particularly for refrigerators and air conditioners, where lower interest rates significantly improved affordability during CY25.

The competitive landscape has also evolved with the continued entry and expansion of international brands, including Midea, Xiaomi, and Hisense, intensifying competition across several product categories. Local manufacturers have responded through capacity enhancement, product innovation, and expansion of distribution networks to strengthen their market presence. A notable structural development has been the rapid adoption of rooftop solar systems across the residential sector. Rising electricity tariffs have accelerated investment in distributed solar generation by improving project payback periods. This has supported demand for inverter compatible appliances, particularly air conditioners, as lower daytime electricity costs encourage greater usage. At the same time, increasing penetration of rooftop solar has created additional investment requirements for distribution infrastructure, including transformers, switchgear, and energy meters, to address network stability and grid integration challenges.

The outlook for the power equipment sector remains supported by the government's continued focus on strengthening transmission and distribution infrastructure. Ongoing investment plans for new grid stations, network augmentation, and loss reduction projects are expected to sustain medium term demand for transformers, switchgear, and related electrical equipment. The government's Power Sector Indigenisation Plan is also expected to support domestic manufacturers by reducing reliance on imported electrical equipment through procurement reforms and greater local value addition. In parallel, measures to address circular debt are intended to improve liquidity across the power sector and strengthen payment flows to equipment suppliers. Nevertheless, production of transformers and switchgear remained subdued during the review period, reflecting procurement delays and budgetary constraints at distribution companies rather than any weakening in underlying demand.

PEL holds strong market positions with ~17% share in refrigerators, ~15% in deep freezers, ~8% in microwave ovens, ~6% in air conditioners, ~5% in washing machines, and ~2% in LED TVs. It leads the power segment with ~86% share in power transformers, ~60% in switchgears, ~15% in distribution transformers, and ~18% in energy meters.

Pak Elektron Limited posted strong revenue growth in CY25, with topline increasing ~20.0% to Rs.83.5bn compared to Rs.69.6bn in CY24. The growth was primarily driven by the Appliances Division, which recorded a ~34.4% YoY increase in revenue to Rs.53.8bn, supported by recovery in consumer demand, improved supply chain efficiency, and continued product innovation across refrigerators and air conditioners. In contrast, the Power Division remained largely stable, supported by higher exports to the U.S, posting marginal growth of 0.5% YoY to Rs.29.7bn. Overall, the revenue performance reflects improving macroeconomic conditions, stronger market penetration in consumer appliances, and the Company’s ability to capitalize on rising demand through an expanded product portfolio and distribution network. The revenue for the Company during 3MCY26 stood at ~PKR 26,592mln (Local: ~90%; Export: ~10%).

Gross margins for the Company slightly improved to ~27.0% in CY25 compared to 26.6% in CY24, while operating margins remained largely stable at ~15.3% (SPLY: 15.9%). Supported by strong sales growth, disciplined operating cost management, and a significant decline in finance costs, the Company reported a robust improvement in profitability. PAT increased by ~62.5% YoY to Rs.3.85bn compared to Rs.2.37bn in CY24, while net profit margin improved to ~6.1% from 4.5% in the previous year, owing to reduction in finance costs. Net margins for the Company during 3MCY26 stood at ~4.3%. 

Going forward, the Company's business outlook remains favorable, supported by the government's continued focus on industrialization, infrastructure development, and incentives for the construction sector. Rising disposable incomes and improving consumer spending are expected to support demand for products offered by the Appliances Division, while increased residential, commercial, and industrial construction activity is likely to drive demand for the Power Division's electrical equipment and EPC services. In addition, the Company has expanded its presence in international markets through the export of power transformers, primarily to the United States, diversifying its revenue base and reducing dependence on the domestic market. The continued growth of its export business, coupled with favorable domestic demand dynamics, is expected to enhance the Company's earnings stability and support its long-term growth prospects.

In CY25, the Company reported gross working capital days of 204 days compared to 194 days in CY24. The increase was primarily driven by higher inventory days, which rose to 97 days from 85 days in the previous year, reflecting increased inventory holdings amid higher sales volumes and product expansion initiatives. Meanwhile, trade receivable days improved slightly to 107 days from 110 days, indicating relatively stable collection efficiency despite strong topline growth. Trade payable days also increased to 18 days compared to 13 days in CY24, providing partial support to working capital management. Consequently, net working capital days improved significantly to 186 days versus 181 days in the previous year.

Coverage indicators for the Company strengthened during CY25, as reflected in the improvement in FCFO/Finance cost coverage to 3.0x, up from 2.3x in the previous year. This expansion signals enhanced debt-servicing capacity despite a slight decline in operating cash generation. FCFO for CY25 stood at PKR 7.2 billion, marginally lower than PKR 7.8 billion in the same period last year, indicating some pressure on core cash flows. However, this was offset by a sharper reduction in finance costs, which declined significantly to PKR 2.6 billion from PKR 3.6 billion in SPLY. The reduction in interest burden more than compensated for the dip in cash generation, thereby driving the improvement in overall coverage metrics and reinforcing the Company’s improved financial resilience.

The Company’s leverage profile reflects a moderate but rising debt position,  increasing to ~31.7% in CY25 from ~29% in CY24. This uptick is primarily driven by a significant increase in total borrowings, which rose to PKR 22.9 billion in CY25 compared to PKR 17.8 billion in the previous year. A notable feature of the debt structure is the high reliance on short-term borrowings, which constitute ~77.6% of total debt, indicating potential refinancing and liquidity risk exposure. Despite the increase in leverage, the Company’s equity base has also expanded to PKR 49.4 billion in CY25 from PKR 43.0 billion in CY24, providing partial support to the balance sheet strength and helping contain overall gearing levels. During the year, the Company converted its entire preference share capital of Rs. 449.58 million along with accumulated preference dividends of Rs. 640.65 million (up to 31 December 2024) into ordinary shares. In return, it issued 67.64 million ordinary shares at a face value of Rs. 10 each.