Karachi: In a striking development, Sazgar Engineering (SAZEW) has revised its earnings projections for the fiscal year 2027 upwards by a significant 61%, signaling a positive outlook for the automotive manufacturer. The change comes after the company disclosed new details during an analyst briefing held on September 25, 2025.

This revision painted a vibrant picture for the future, with earnings estimates for FY28 also increased by 60%. However, the forecast for FY26 has been adjusted downwards by 7%, attributed to lower-than-anticipated gross margins.

The company anticipates distributing dividends of Rs56 per share in FY26 and Rs73 per share in FY27, maintaining a payout ratio of approximately 20%.

Sazgar Engineering also unveiled revised sales forecasts, expecting a 39% increase in unit sales for FY27, reaching 20,800 units. This surge includes around 330 units from newly launched Canon and TANK models and about 1,400 units from existing Haval variants. The company is currently producing 60 units daily, equating to a monthly production rate between 1,300 to 1,350 units. With the new production facility anticipated to be operational by March 2026, output is expected to rise to about 100 units a day.

Despite the optimistic sales assumptions of 1,730 units monthly, this figure is 21% lower than the company's own expectations for FY27. The heightened demand has also extended vehicle delivery times from 2-3 months to 3-4 months.

In a bid to expand, Sazgar announced a substantial capital expenditure plan of Rs11.5 billion for a new facility, which will double the existing capacity from 24,000 to 48,000 units. This expansion will be complemented by a 5MW solar rooftop installation, enhancing production efficiency.

For FY27, gross margins are projected at 17%, considering the expiration of benefits under the Auto Policy 2021-2026 by June 2026. FY26 gross margins are expected to be around 22%, factoring in a carbon levy and the launch impact of PHEV models, which do not benefit from current policies.

The average revenue per vehicle is also set to experience notable changes. In FY25, the average selling price was Rs9.1 million, dropping slightly to Rs8.8 million in the last quarter due to a higher proportion of petrol variants. For FY26, the average price is anticipated to rise to Rs9.6 million, reflecting the introduction of PHEV models. By FY27, the average net sales per vehicle are projected to reach Rs11.6 million, marking the full-year impact of the Cannon Alpha and Tank 500 models.