PACRA Maintains Entity Ratings of Dawood Equities Limited

Dawood Equities Limited ('DEL' or 'the Company') focuses primarily on equity brokerage services while underwriting and consultancy services are also provided. The clientele is concentrated to Retail and HNWI's, while the Company is aiming to enhance its footprint in Institutions/Corporates segment. The KSE-100 Index has witnessed a significant surge in investor interest, repeatedly touching historic highs and, for the first time, breaching the 125k-point mark in FY25. Despite this rally, the market’s P/E ratio remains relatively low, indicating room for further upside. A notable catalyst has been the reduction in the policy rate at the start of FY25, which prompted a shift in investor preference from fixed-income instruments to equities, fueling fresh buying momentum. This environment has created a favorable backdrop for the brokerage industry, with higher trading volumes, increased retail participation, and enhanced transaction-based revenues. While FY25 has been a strong year for the sector, sustaining investor confidence beyond FY25 will hinge on political stability, macroeconomic resilience, and the continuation of market-friendly policies. DEL’s performance was in line with the market's upward trend. The Company's brokerage income is the primary source of topline. The brokerage income stood at ~PKR 177mln as at Mar'25 while it was ~PKR 91mln in SPLY. During 9MFY25, earned a net profit of ~PKR48mln (SPLY: ~PKR 21mln). This surge in profitability was primarily driven by higher brokerage income and underwriting commissions. DEL has an adequate equity base of ~PKR 359mln at end-Mar'25. At end-Mar'25 the current assets of the Company stood at ~PKR 628mln against the current liabilities of ~PKR 308mln. The Company has an adequate liquidity profile. The Company has a prop book of ~PKR 82mln at the end-Mar'25 (SPLY: ~PKR 61mln). Ownership structure is considered stable, with the business acumen of the primary sponsor well noted. The ratings take comfort from an experienced and qualified management team. The client services are adequate, supported by a research analyst while the strength of the research department may be enhanced. The control framework is deemed satisfactory, primarily attributed to the presence of a risk management department. Moreover, DEL is expanding its branch network through franchising model.
Moving forward, income diversification, enhancement or sustainability in market share, and sustainability in revenue and profitability remains vital. Meanwhile, it is imperative to uphold robust internal controls, retention of key management personnel, and diligently monitor risks.

About the Entity
Dawood Equities Limited was incorporated under the Companies Ordinance 1984, on May 3, 2006 as public limited company. The Company obtained listing on Pakistan stock Exchange in 2008. Mr. Ayaz Dawood, the primary sponsor, owns ~19% stakes in the Company, followed by Equity International (Pvt.) Limited (~16%), B.R.R. Investment (Pvt.) Ltd. (10%), and BFIs/IFIs/ Individuals (~9%). While 37% pertains to free float shares. The Company’s service offering includes economic and investment research, equity brokerage, and corporate finance & financial advisory services. The Company operates through seven branch offices, located in Karachi, Hyderabad, Lahore, Faisalabad and Sargodha, reporting to the Head Office in Karachi. Mr. Aziz Habib is the CEO of the Company having diverse experience brokerage business. The Company’s Board of Directors (BoD) comprises seven members, which include two independent directors, four non-executive directors and one executive director including 2 female directors in conformity with the Code of Corporate Governance (CCG).