SYS set for 71% profit surge on global tailwinds

MG News | July 15, 2025 at 04:22 PM GMT+05:00

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July 15, 2025 (MLN): Riding high on strong demand from the Middle East and North American markets, Systems Ltd (SYS) is poised to deliver a notable year-on-year net profit growth of 71%, with earnings in 2QCY25 expected to hit Rs2.9 billion and EPS of Rs1.9, a sharp rise from Rs1.7bn and EPS Rs1.1 in the same quarter last year, according to a Earning Preview published by AKD Securities.

Buy call reaffirmed with 49% upside

AKD Securities continues to rate SYS a ‘Buy’, highlighting the company’s solid fundamentals and growth trajectory. The brokerage pegged a target price of Rs176/share by Dec 2025, representing an upside potential of over 49% from current levels.

Quarterly revenue is projected at Rs19.5bn, marking a 23% YoY increase, underpinned by sustained traction in export-led operations.

Gross margins are set to rise to 25.5%, up from 22.0% last year, driven by operational consolidation, easing inflation and an exit from unprofitable local contracts.

A sharp 47% decline in finance costs reflects tighter cost controls, while the company is also set to benefit from Rs309 million in FX gains, thanks to a modest 1.3% quarter-on-quarter rupee depreciation.

Tech sector leader with global footprint

Buoyed by surging IT exports, a focused growth strategy and an expanding footprint in high-potential markets, SYS is positioning itself as a top-tier investment choice in Pakistan’s tech sector, backed by a 65% year-on-year profit surge in 1HCY25 and strong revenue momentum compared to 1HCY24.

Systems Ltd posted 21% year-on-year revenue growth in 1HCY25, reaching Rs37.6bn, up from Rs3bn in the same period last year. Other income skyrocketed nearly 7x to Rs782 million, compared to just Rs115m in 1HCY24.

SYS reported 65% year-on-year growth in net profit, reaching Rs5.35bn for 1HCY25.

Correspondingly, EPS jumped to Rs3.6 from Rs2.2 last year, underscoring strong shareholder value creation through a combination of operational leverage and financial discipline.

	2QCY25E	2QCY24	YoY	1QCY24	QoQ	1HCY25E	1HCY24	YoY
Revenue	19,520	15,829	23%	18,080	8%	37,600	31,023	21%
Cost of Revenue	14,535	12,350	18%	13,530	7%	28,064	23,940	17%
Gross Profit	4,985	3,479	43%	4,550	10%	9,535	7,083	35%
Gross Margins	25.5%	22.0%	—	25.2%	—	25.4%	22.8%	—
Operating Profit	2,869	1,874	53%	2,499	15%	5,368	3,838	40%
Other Income	448	171	2.6x	334	34%	782	115	6.8x
NPAT	2,854	1,672	71%	2,501	14%	5,355	3,243	65%
EPS (PKR)	1.9	1.1	—	1.7	—	3.6	2.2	-

Source: PSX, AKD Research

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