The results for corporate profitability are pleasantly surprising as the aggregate profitability shown by listed companies amounted to Rs 213.9 billion.
The year-on-year growth rate for the recent quarter is 38 per cent. In sector-wise profitability: commercial banks have contributed to the highest sum of Rs48 billion earning in the quarter.
The oil and gas exploration and production sector also yields the highest profits and contributed Rs41bn tax for the quarter.
Furthermore, the sector that has reported surprising growth in profit is technology and communications. Put together the total earnings are Rs5.9bn, which is 27.6 times higher from Rs207m in the same quarter of 2019.
Software companies like Avanceon Ltd, Systems Ltd, TRG Pakistan and Netsol Technologies saw their share prices grow during the year.
TRG Pakistan shares were at Rs12.87 on March 25, 2020. It is now trading at Rs143, which is 11 times higher in one year. Netsol Technologies surged from Rs27.16 a share to Rs285, up ten times in one year.
Analysts said that technology companies even in the United States (US) challenged the worst economic downturn and reported robust financial growth during the pandemic.
Engineering sectors mainly comprising steel companies also outperformed most sectors with earnings of Rs5.1bn, recording a growth of 18.7 times from Rs257m a year ago.
The Cement sector has benefitted from the government’s great incentives to the construction industry. They have reported 570 per cent growth, a total profit of Rs11.7bn which was Rs1.7bn in 2019.
“The strong corporate profitability provides strong support to the market and should be a key driver for the KSE-100 index once political noise dies down,” said Raza Jafri, head of equities at Intermarket Securities.
The food sector’s earnings were satisfactory but were dragged down by the poor profitability of FrieslandCampina Engro.