KTrade tips Systems Limited for 43% gain by June 2026

October 14, 2025 (MLN): Systems Limited (SYS) could deliver returns of 43% over the next eight months, surging from its current price of Rs150 to Rs215, according to KTrade Research, which positions Pakistan's leading IT services exporter as a prime beneficiary of global digital transformation and AI adoption.

 The brokerage has initiated coverage on the stock with a June 2026 target price of Rs215 per share and a "Buy" rating, highlighting the company's strategic positioning in high-growth Middle Eastern markets and partnerships with global technology giants.

Middle East dominance drives growth story

SYS generates 57% of its revenue from the Middle East, where national transformation agendas like Saudi Vision 2030 and UAE's AI Strategy 2030 are fueling unprecedented technology spending.

Systems Limited's revenue from the region has grown at a remarkable 76% compound annual growth rate over the past five years.

"SYS is doubling investments and expanding in KSA, unlocking 3-5x growth potential versus the UAE," the report notes, pointing to Saudi Arabia's $100 billion Project Transcendence AI fund and $10 billion annual ICT infrastructure budget as key catalysts.

Strategic acquisitions, including NdcTech and Treehouse Consultancy, have consolidated Systems Limited's expertise in banking technology, with the company holding exclusive Temenos Country Model Bank implementation rights across MENA and Asia Pacific for up to 15 years.

Accenture partnership opens European gateway

A newly announced multi-year Master Services Agreement with Accenture UK positions Systems Limited to accelerate growth in Europe, where the company currently generates just 5% of revenue but expects a 33% compound annual growth rate through 2030.

The partnership, secured through subsidiary TechVista Systems, will deliver AI-powered business process outsourcing services and provides Systems Limited with enhanced global credibility to win enterprise clients across European markets.

Currency hedge and margin recovery ahead

After margin compression in 2024 due to Pakistani rupee appreciation, analysts expect profitability to recover as cost optimization measures take effect.

Systems Limited generates 93% of revenue in US dollars while only 42% of costs are dollar-denominated, creating a natural currency hedge under normalized depreciation scenarios.

Gross margins are projected to expand 570 basis points from the 2024 trough of 23.8% to reach 29.5% by 2028, supported by AI-led process automation, contract renegotiations, and strategic resource allocation to lower-cost delivery centers in Egypt and across MENA.

Earnings momentum building

The company is forecast to deliver five-year revenue growth of 25% annually, with earnings per share expected to surge 48% in 2025 to Rs7.50 and reach Rs16.91 by 2028.

This growth trajectory is underpinned by 93% recurring revenue, expanding client relationships across 250 enterprise customers, and Pakistan's accelerating IT export momentum.

Systems Limited contributes over 5% to Pakistan's $3.8 billion IT exports, a share expected to rise above 7% by 2027 as the country targets $10 billion in technology exports by 2029 under the "Uraan Pakistan" initiative.

Trading at a forward 2026 price-to-earnings ratio of 15.3x, Systems Limited offers a 27-40% discount versus its five-year historical average and current regional peer multiples.

The stock's price-to-earnings-growth ratio stands at 0.50, representing a steep 77% discount to regional competitors.

"We see SYS outperforming the broader market as increasing global tech spending, strategic partnerships, and AI-led transformation drive long-term earnings momentum," said Minal Azhar, Investment Analyst at KTrade. 

The company's $815 million market capitalization and leadership position in digital banking transformation, telecommunications, and retail technology positions it to capture accelerating demand across its core verticals.

The company employs over 7,500 professionals globally, with revenue per employee reaching $31,600 in 2024 and growing at 24% annually since 2019.

This productivity metric still trails the regional peer average of over $50,000, suggesting significant room for efficiency gains as the company scales.

Policy tailwinds are further strengthening the investment case.

Tax incentives for IT exporters, foreign currency retention rights allowing companies to keep 50% of export proceeds, and streamlined M&A approvals position Systems Limited to execute its expansion strategy while maintaining structural cost advantages.

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