Is SAZEW taking on Toyota with the TANK 500?

January 22, 2026 (MLN): Sazgar Engineering Works Limited (PSX: SAZEW) has made a decisive leap into Pakistan’s premium SUV space by opening bookings for the locally assembled (CKD) TANK 500.

The move is expected to lift earnings and accelerate the company’s exposure to the fastest-growing segment of the automobile market.

The TANK 500 is available in PHEV and HEV variants priced at Rs22.5m and Rs20.5m, respectively, significantly enhancing SAZEW’s product mix and medium-term earnings profile.

The launch came as SUVs continue to reshape Pakistan’s auto landscape, with PAMA data showing SUVs now account for an average 18% of total auto sales in CY25, rising to nearly 28–30% when non-PAMA players are included, compared to just 9% in CY21, reported by Arif Habib Limited.

Positioned as a premium full-size SUV, the TANK 500 blends luxury, advanced hybrid technology, and off-road capability.

It is powered by a 2.0L turbo petrol engine in both HEV and PHEV configurations, paired with a 9-speed automatic transmission and 4WD.

Globally, the model has already established a footprint across the Middle East, Southeast and Central Asia, Australia, and select markets in Africa and Latin America, supporting confidence in its local debut.

In Pakistan, the TANK 500 competes directly with established players such as Toyota’s Land Cruiser Prado and Fortuner, offering a hybrid-enabled alternative to the Fortuner and a compelling value proposition against the Prado.

Based on the initial rollout, expected deliveries of 200 units in 4QFY26 are projected to add Rs5.3 per share to earnings.

If deliveries scale to 700 units in FY27, equivalent to around 58 units per month, the earnings contribution could rise to Rs17.59 per share.

Momentum is expected to extend further with the anticipated rollout of the Cannon Alpha 4x4 PHEV.

While FY27 estimates already include Cannon Alpha’s contribution, an earlier-than-expected launch in 4QFY26 could provide additional upside.

With Pakistan’s pickup market averaging approximately 11,000 units annually, base-case deliveries of 1,000 units in 4QFY26 could add Rs19.54 per share to earnings.

For FY27, estimated deliveries of 4,200 units, or around 350 units per month, could contribute Rs81.78 per share to EPS.

Taking into account both the TANK 500 and Cannon Alpha introduces, projected earnings stand at Rs330.17 per share in FY26, Rs348.9 per share in FY27, and Rs400.9 per share in FY28, supported by dividend payouts of Rs67.5 per share in FY26 and Rs71.5 per share in FY27.

With an improving product mix, rising exposure to premium SUVs, and expanding hybrid offerings, SAZEW’s earnings trajectory appears increasingly robust. The BUY stance is reiterated with a December 2026 target price of PKR 2,566 per share, implying a potential upside of 31%.

Source: Arif Habib Limited

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