Lahore: Pak Elektron Limited (PAEL) has reported a notable earnings growth of 64% year-on-year for the first nine months of 2025, driven by increased revenue and improved gross margins, according to a recent announcement.

In the third quarter of 2025, the company recorded earnings of Rs681 million, translating to an earnings per share (EPS) of Rs0.74. This marks a 52% increase in earnings compared to the same period last year, although there was a 60% decline quarter-on-quarter. The results aligned with market expectations.

The company's revenue for 9M2025 rose by 13% year-on-year, bolstered by higher volumetric sales in its Appliance division during the first half of the year. However, net sales remained flat year-on-year and fell by 46% quarter-on-quarter to Rs11.3 billion, impacted by seasonal demand fluctuations and flood-related disruptions.

Gross margins for the third quarter of 2025 improved to 27.5%, up from 25.9% in the same quarter last year. This improvement is attributed to a stable currency environment. Over the nine-month period, gross margins were recorded at 27.2%, compared to 26.5% in the previous year.

The effective tax rate for the third quarter increased to 39%, compared to 26% in the third quarter of 2024. For the nine-month period, the effective tax rate was 45%, slightly higher than the 43% recorded in the previous year.

Distribution expenses rose by 5% year-on-year in the third quarter but decreased by 35% quarter-on-quarter, amounting to Rs815 million, due to a decline in volumetric sales. Additionally, finance costs saw a significant reduction, declining by 38% year-on-year and 24% quarter-on-quarter, which positively impacted overall profitability.

Pak Elektron Limited's stock is currently trading at a 2025 estimated price-to-earnings ratio of 7.9 and a 2026 forecasted ratio of 7.0, reflecting investor confidence in the company's financial outlook.