April 29, 2025 (MLN): Targeting $10 million in revenue over the next three years, Zarea Limited (PSX: ZAL), the B2B e-commerce marketplace, is on the cusp of launching its export division, with plans to begin exports of high-demand agricultural commodities such as corn, Rhodes grass, and corn silage.
The aforesaid information was revealed by the Company’s management during the corporate briefing held today.
Signalling Zarea’s entry into international trade, this strategic move underscores its transformation into a full-spectrum commodities powerhouse, aimed at capturing opportunities in high-demand regional markets.
The export initiative is just one pillar of a broader expansion roadmap unveiled during Zarea’s recent corporate briefing. Management shared that the company, having raised Rs1bn through its IPO in February 2025, has so far utilized only Rs46m.
A substantial portion of the funds will support the establishment of an import division and an in-house logistics network.
To meet the industrial sector’s procurement needs, Zarea is setting up a dedicated import arm. The firm has already secured a Rs200m letter of credit (LC) facility from Bank Alfalah to facilitate the sourcing of essential materials like soybean, steel, and chemicals.
Meanwhile, the logistics initiative aims to strengthen operational control and reduce reliance on third-party carriers, ultimately enhancing delivery efficiency and customer satisfaction.
Zarea is also venturing into value-added processing of commodities such as corn silage and agri-biomass through bailing, threshing, and packaging. Furthermore, a robust network of regional collection centers is being developed across Punjab and Khyber Pakhtunkhwa to streamline procurement and aggregation of seasonal crops.
On the financial front, Zarea reported a remarkable 171% Yoy revenue increase in the first nine months of FY25, reaching Rs805m. Net profit surged by 131% YoY to Rs454m during the same period.
For the full fiscal year, the company projects 150% revenue growth, with an expected increase of 120–130% in FY26. These gains were primarily fueled by strong platform usage fees (Rs294m) and exponential growth in the agri-biomass segment (Rs512m).
The management also stated that with a current P/E ratio of 6.81x, significantly below the tech sector average of 37.92x, the stock offers a notable upside, especially as the company continues to scale. Its Return on Equity (ROE) ranks among the highest within the sector, further underscoring its operational efficiency.
Notable clients include industry giants such as Packages Group, Sapphire, Nishat, Interloop, and Style Textile, reflecting Zarea’s deep market penetration and strong brand credibility.
The company’s digitised ecosystem now serves over 50 cities, processes 17,000+ transactions, and has moved over 250,000 metric tons of commodities.
Zarea’s future growth is anchored in key macro trends such as increasing agricultural output, construction activity, digitisation of trade, SME expansion, and enhanced internet connectivity.
With a Shariah-compliant business model and a tech-first approach, Zarea is rapidly positioning itself as a leader in the digital transformation of Pakistan’s commodity trade landscape.
The management also highlighted the financial performance of the company. The company reported net revenue of Rs805 million during the first nine months of FY25, marking a 171% increase, while net profit surged by 131% to Rs454m in the same period.
Its income streams were driven by Rs294m in platform usage fees and Rs512m from its agri-biomass segment.
The company’s earnings per share rose to Rs1.73 as of the nine months. Its asset base reached Rs2.1bn, with shareholders’ equity standing at Rs2.06bn. From FY21 to 9MFY25, Zarea has maintained a revenue CAGR of 207% and a profit CAGR of 233%,
With regards to valuation metrics, the company is currently trading at a price-to-earnings ratio of 6.81x, substantially lower than the tech sector’s average P/E of 37.92x, offering an 82% discount to investors.
Despite this discounted valuation, Zarea boasts one of the highest returns on equity among listed technology firms, indicating strong profitability and efficient capital utilisation, the management emphasised.
Zarea’s clientele includes industry giants such as Packages Group, Sapphire, Nishat, Interloop, Stylers, and Style Textile, it noted.
The company has processed over 17,000 transactions across more than 50 cities and has facilitated the trade of over 250,000 metric tons of commodities, it informed.
The management is of the view that with its expansion plans, digital platform upgrades, and a Shariah-compliant business structure, Zarea is strategically positioned to lead Pakistan’s B2B commodities market into a new era of digitised, sustainable, and scalable growth.
Disclaimer: The above information was disclosed by the Company’s management during the corporate briefing held today. It does not constitute analysis, opinion, or commentary by Mettis Global.
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Posted on: 2025-04-29T20:02:19+05:00
