TOMCL targets 10% growth, eyes solar transition

November 11, 2025 (MLN):  The Organic Meat Company Limited (PSX: TOMCL) has set a conservative growth target of 10% for the upcoming fiscal year, a focused approach toward sustainable expansion and operational efficiency.

To optimize costs and improve energy efficiency, TOMCL is actively pursuing a solar transition to address its 1.8 MW power requirement. Discussions are underway with several suppliers to implement solar solutions, with management expecting 10–15% savings in power costs and a positive impact on overall operational expenses, as highlighted in the company's corporate briefing session.

Currently, 98% of TOMCL’s Gaddap operations rely on diesel.

However, the Korangi facility operates on an energy mix of approximately 70% solar, 20% grid, and 10% diesel,

The company also aims to become completely leverage-free by next few years, marking a major milestone in its ongoing financial restructuring efforts.

TOMCL is actively supplying meat products to companies operating in the fast food industry and is working to expand its frozen beef offerings specifically tailored for fast food applications.

With a 20% share of Pakistan’s meat export market, TOMCL stands among the leading players in the sector.

A major breakthrough in the retail segment has been the company’s partnership with Carrefour, which management highlighted as a significant step forward in expanding its customer base.

In addition, TOMCL is collaborating with the government to establish a Foot and Mouth Disease–free (FMD-free) compartment, a critical step toward meeting global export standards and unlocking access to higher-value international markets.

The company is also expanding its product portfolio in the pet chews segment, which management expects to become a significant contributor to both volume and value growth over the next two to three years.

On the export front, TOMCL has strengthened its global presence by securing major international contracts, including a $12m deal for frozen cooked beef exports to China and an $8.1m agreement with Gold Crest Trading FZE for frozen boneless beef exports to the UAE.

 The company’s geographic diversification has also improved, with China’s contribution to revenue increasing from 5% to 17%, while the UAE continues to represent 56% of total sales.

In October 2025, TOMCL commenced operations at its Karachi Export Processing Zone (EPZ) facility through its wholly owned subsidiary, Mohammad Saeed Mohammad Hussain Limited. Additionally, the company completed Phase 2 of its expansion, adding 300 metric tons per month of production capacity for frozen cooked beef.

For FY 2025, TOMCL reported net sales of Rs 14bn, up 18.72% from the previous year’s Rs 11.8bn. Despite strong revenue growth, profit after tax declined to Rs 430m from Rs 497m in FY 2024, resulting in earnings per share (EPS) of Rs 2.76, compared to Rs 3.35 a year earlier a 17.61% year-on-year decrease.

Management attributed the margin pressure to volatile livestock prices, inflationary impacts on raw materials and packaging, higher energy costs, and a significant increase in taxation from 1% of turnover to 39% of profit.

While gross margins have been contracting annually due to cost pressures and taxation, management clarified that sales tax changes have not affected operations.

Regarding market expansion, TOMCL stated that entry into Malaysia remains challenging, as the market primarily demands buffalo meat, while Brazilian and Australian suppliers hold advantages in cow meat shelf space. The company will instead focus on regions where it can more effectively leverage its competitive strengths.

Management further indicated that no stock split is currently under consideration.

In recognition of its improved financial position, TOMCL’s credit rating was upgraded by VIS from ‘A-/A-2’ to ‘A/A-1’, reflecting enhanced creditworthiness.

Additionally, TOMCL became the first Pakistani meat exporter approved by Carrefour outlets across the UAE, Qatar, and Oman, emphasizng its commitment to quality, export excellence, and international market growth.

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