Lahore: Sazgar Engineering Works (SAZEW) addressed its financial performance for fiscal year 2026 and outlined future strategies in a corporate briefing session. The company revealed plans to absorb the current GST increase while awaiting a new auto policy potentially reducing GST, and confirmed no immediate plans to raise vehicle prices.

According to JS Global, Sazgar's management is hopeful for a favorable auto policy and emphasized its customer-centric approach by maintaining current vehicle prices despite an 18% GST. Plans for launching the Canon Alpha at a competitive price were unveiled, alongside a display of new electric vehicle models at the Pakistan Auto Show. The ARCFOX brand's introduction remains dependent on policy developments, while future product launches will align with anticipated government support for plug-in hybrid electric vehicles (PHEVs).

The company announced a significant Rs22 billion expansion, including a new paint shop, expected to complete within 9-10 months. The expansion will increase production capacity to approximately 180 vehicles daily, up from the current 100. Financing will primarily come from debt, with the remainder through equity.

Sazgar's management reported a decline in the fourth quarter gross margin to 22.3% due to changes in the product mix. The company is preparing for margins to align with industry standards. With the largest dealership network among new entrants in Pakistan, Sazgar operates 32 dealerships, with plans to add 5-6 more.

Concessionary duties on electric vehicle parts remain in place, with hybrid and plug-in hybrid parts subject to lower duties. The company maintains a positive outlook, with JS Global reiterating a "BUY" stance on SAZEW, trading at an estimated FY27 price-to-earnings ratio of 4.1x.