PTC eyes Rs65/share as Telenor deal promises synergies

October 9, 2025 (MLN): Pakistan Telecommunication Company Ltd (PSX:PTC) could see its fair value rise above Rs65 per share following the acquisition of Telenor Pakistan, as improving profitability, synergy gains and favorable financing terms strengthen the earnings outlook.

According to a report by Topline Securities, the Rs108 billion transaction structured on a cash-free and debt-free basis appears increasingly well-timed amid easing global interest rates and improving sector fundamentals.

 With Telenor’s earnings before interest, tax, depreciation and amortization (EBITDA) already up over 15–16% since the deal was negotiated and its average revenue per user (ARPU) climbing more than 30%, the acquisition is expected to deliver strong earnings accretion for PTC.

PTC estimated incremental EPS impact from the transaction:

Source: Topline Research

The deal values Telenor Pakistan at an enterprise value (EV)/EBITDA multiple of 2.25x, well below international and regional averages.

Globally, telecom companies trade at EV/EBITDA multiples of around 6.7x, while emerging and frontier markets are currently at a 25% discount, translating into a fair multiple of roughly 5x for Pakistan.

Telenor Pakistan had reported revenue of Rs112 bn and EBITDA of Rs48bn for the 12 months ending September 2023, which has since risen to over Rs55bn.

Source: Telenor.com, Topline Research

ARPU has also grown sharply from Rs195 in September 2023 to Rs255 by June 2025.

This improvement, combined with a lower interest rate environment, strengthens the financial case for PTC, which plans to fund the acquisition through a US$400 million seven-year debt facility arranged by the International Finance Corporation (IFC) in partnership with Silk Road Fund (SRF) and British International Investment (BII).

Topline estimated that the transaction could contribute between Rs3.7 and Rs4.9 per share to PTC’s earnings over the first three years, assuming annual EBITDA of Rs55bn and financing costs at SOFR plus 5%, similar to other IFC-backed projects such as the Pakistan International Bulk Terminal (PIBTL).

The report also highlighted the potential for a sizeable bargain gain on the acquisition, as Telenor Pakistan’s non-current assets excluding deferred tax and contract costs are valued at around Rs160–170 bn on its parent company’s balance sheet, significantly above the agreed enterprise value of Rs108bn.

Post-acquisition, PTC’s consolidated EBITDA is expected to rise to approximately Rs135 bn, while total net debt would increase to Rs322bn, including Rs113bn related to the Telenor acquisition.

Following completion, the merged Ufone–Telenor entity will command around 35% of Pakistan’s mobile market, becoming the second-largest player after Jazz.

With Ufone’s strong urban presence and Telenor’s extensive rural and northern coverage, PTC is expected to achieve nationwide reach, improved ARPUs, and long-term efficiency gains through network consolidation, shared infrastructure and reduced overheads.

Copyright Mettis Link News