Pak Elektron Limited ('PEL' or 'the Company') is a public limited company, listed on the Pakistan Stock Exchange. 

Pak Elektron Limited (PEL) was incorporated in 1956 and has since become a prominent name in the manufacturing of electrical appliances. In 1978, the Saigol Group acquired a majority stake in the company, transforming PEL into the flagship entity of the group. In a strategic move to streamline its operations, the Board of PEL and its wholly owned subsidiary, PEL Marketing (Private) Limited (PMPL), approved a scheme of arrangement for the amalgamation of PMPL into PEL. This merger, which took effect on April 30, 2020, was aimed at enhancing operational efficiencies and strengthening the company's market position.

The company is primarily involved in the manufacturing and sale of electrical capital goods and a wide range of domestic home appliances. With a focus on innovation and quality, PEL produces products that cater to both industrial and household needs, establishing itself as a key player in the consumer electronics and home appliances sectors.

The Saigol Group owns approximately 51% of the company's shareholding, primarily through family members, with Mr. Naseem Saigol holding the majority stake at 25.44%. The remaining shareholding is distributed as follows: 6.61% held by insurance companies, 2.50% by financial institutions, 3.0% by joint stock companies, 1.4% by modarabas and mutual funds, and 7.8% by other entities. The general public holds the largest portion, accounting for 27.1%.

The ownership of the business is considered stable, as 51% of the shareholding is held by the Saigol family, with no significant changes anticipated in the near future. This strong familial stake provides a solid foundation for the company’s long-term strategic direction and continuity.

Saigol Group is one of Pakistan's leading industrial conglomerates, with diverse interests spanning across services, manufacturing of home appliances and electrical equipment, textiles, and power generation. The group’s wideranging portfolio reflects its strong presence in key sectors of the economy, driving innovation and growth across various industries.

The Group boasts a robust business profile with a prominent presence across Pakistan's Textile, Engineering, and Energy sectors, demonstrating significant influence and leadership in these key industries.

The Company's Board of Directors consists of eight members, including the Chairman, three executive directors, three non-executive directors, and one independent director. The Board reflects a strong presence from the Saigol Group, with three members (the Chairman and two executive directors) affiliated with the group. Additionally, one independent director is nominated by the National Bank of Pakistan (NBP).

The Board of Directors comprises individuals with diverse and valuable expertise. The Chairman, Mr. Naseem Saigol, holds directorships in multiple companies within the Saigol Group and has served in leadership roles across various trade associations. Mr. M. Murad Saigol, the Chief Executive Officer (CEO) of PEL, also serves as a director in several group entities and brings extensive senior management experience spanning decades. 

The Board exercises oversight through two key committees: the Audit Committee and the Human Resource & Remuneration Committee.

M/S Rahman Sarfaraz Rahim Iqbal Rafiq & Co., Chartered Accountants, classified as category ‘A’ by the SBP with a satisfactory QCR rating, serve as the Company's external auditors. The firm has issued an unqualified opinion on PEL’s financial statements for the year ended December 31, 2024.

The Company has a well-defined organizational structure aligned with its two primary divisions –Home Appliances and Power. Each division is supported by distinct departments covering the following functions: i) Production, ii) Quality Control, iii) Research and Development, iv) Marketing, v) Supply Chain, and vi) Planning. Meanwhile, the Finance, IT, Human Resources, and Internal Audit departments operate as shared services across both divisions.

The Company’s management team is composed of seasoned professionals with extensive market knowledge and technical expertise. Mr. Murad Saigol, the CEO, has been with the Company since 2005, and is supported by Mr. Zeid Yousuf Saigol, who serves as Director of Operations for the Power Division.

Management meets on an as-needed basis to discuss the Company's operational matters. However, given the size and complexity of the Company’s operations, there is a need for formal management committees to enhance effectiveness and decision-making. This presents an opportunity for further improvement.

PEL has implemented various modules of the Oracle E-Business Suite to address the diverse operational and accounting needs of the Company. Oracle Financials and Oracle Supply Chain manage procurement, inventory, and order booking processes, while Oracle Discrete Manufacturing has been deployed in both divisions. Additionally, a customized software solution for HR and payroll management has also been implemented.

To ensure operational efficiency, the Company has established a robust internal audit function that conducts regular reviews of operations and processes. The internal audit team is responsible for identifying potential risks, ensuring compliance with internal policies, and recommending improvements to enhance overall performance and controls. This proactive approach helps the Company maintain high standards of governance and operational effectiveness.

The household appliances industry in Pakistan remains competitive and organized, led by local players like Dawlance (Arçelik), Haier, PEL, Waves Singer, and Orient, along with global brands such as Samsung and LG. In CY24, the sector's size was estimated at PKR~328.6bln, reflecting a slight YoY growth of ~0.5% after a ~22.1% contraction in CY23. Major appliances contributed ~89% of total revenue, with water dispensers ~28%, refrigerators ~19%, and deep freezers ~15% as top products. Production declined ~6.5% YoY in FY24, with air conditioners down ~35.6%, refrigerators ~18.8%, and deep freezers ~5.8%. The sector is heavily import-dependent, exposing it to currency volatility and global price changes. Duties on imported components remain high, with total duties on ACs rising to ~46% in FY25. Despite cost pressures, PACRA-rated players saw revenue growth of ~42.2% in CY24, though gross margins declined to ~20.2% from ~28.7% in CY23. Operating margins also fell to ~15.3%, while net margins improved slightly to ~4.5%. Lower inflation ~13.3% in CY24) and a stable PKR have supported price stability. The working capital cycle improved to ~171 days, and borrowings dropped 26% YoY to PKR42.3bln by Jan’25. Overall, the outlook remains stable, supported by seasonal demand, brand-driven consumption, and growth in energy-efficient appliances.

PEL holds strong market positions with ~19% share in refrigerators, ~15% in deep freezers, ~15% in microwave ovens, ~9% in air conditioners, ~4% in washing machines, and ~1% in LED TVs. It leads the power segment with ~100% share in power transformers, ~70% in switchgears, and ~18% in both distribution transformers and energy meters.

During 3MFY25, PEL recorded revenue of ~PKR 14.47 bln, reflecting a ~14% growth compared to ~PKR 12.71bln during the same period in FY24. On a full-year basis, the Company reported revenue of ~PKR 53.11 bln in FY24, representing a robust increase of ~37.3% compared to ~PKR 38.69 bln in FY23.

In 3MFY25, PEL reported a gross profit margin of ~26.2% and an operating profit margin of ~13.4%, slightly lower than the previous year. In FY24, the gross margin stood at ~26.6%, with an operating margin of ~15.9%, both reflecting improvements over FY23, when the gross margin was ~28.7% and the operating margin was ~18.6%. Despite a narrowing margin trend in FY25, the Company still achieved ~4.5% net income growth, demonstrating solid cost discipline and operational resilience.

Going forward, the Company is poised to benefit from the government's industrialization initiatives, including incentives for the construction sector. As disposable incomes rise, demand for products from the Home Appliances Division is expected to increase. Additionally, the growing construction activity in both the residential and commercial sectors is likely to drive higher demand for products from the Power Division.

In 3MFY25, PEL reported gross working capital days of ~205 and net working capital days of ~193, indicating a relative increase in the time taken to convert assets into cash compared to FY24. In FY24, gross working capital days improved to ~194 (FY23: ~262), and net working capital days decreased to ~181 (FY23: ~251), reflecting a marked enhancement in working capital efficiency over the previous year. The improvement in FY24 was driven by better inventory and receivables management, as average trade receivables dropped to ~110 days from ~141 in FY23. However, the uptick in working capital days during 3MFY25 suggests renewed pressures on the cash conversion cycle, possibly due to seasonal or market-specific dynamics. Despite this, the Company maintains strong liquidity ratios, with a current ratio of 7.7x in 3MFY25 (FY24: 8.1x; FY23: 9.4x), well above industry norms.

In 3MFY25, the interest coverage ratio (EBITDA/Finance Cost) improved to ~2.9x (FY24: ~2.6x; FY23: ~2.4x), indicating a higher ability to service finance costs from operational earnings. Free cash flows from operations (FCFO) were ~PKR1.48bln during 3MFY25 (FY24: ~PKR7.89bln; FY23: ~PKR7.45bln), slightly down due to timing effects and working capital changes. FCFO-to-finance cost coverage stood at ~1.9x in 3MFY25 (FY24: ~2.3x; FY23: ~2.1x), while broader debt coverage (FCFO / Finance Cost + CMLTB + Excess STB) was ~1.3x in 3MFY25 (FY24: ~1.7x; FY23: ~1.4x), showing continued strength in financial resilience. The consistent improvement in these ratios underscores PEL’s ability to fund operations and service financial commitments effectively, despite fluctuations in the cost of capital.

PEL maintains a moderately leveraged capital structure. As of 3MFY25, total borrowings stood at ~PKR21.46bln (FY24: ~PKR17.89bln; FY23: ~PKR15.97bln), with short-term borrowings making up ~75.7% of total debt. The leverage ratio (Total Borrowings / Total Capitalization) stood at ~32.6% in 3MFY25, up slightly from ~29.0% in FY24 but still below FY22 levels (~37.0%). This increase in debt is largely attributed to a rise in short-term borrowing from financial institutions. Nonetheless, the Company continues to show a balanced capital structure, allowing for financial flexibility while keeping refinancing risks manageable. Interest payable coverage also improved to ~63.4 days in 3MFY25, reflecting better liquidity and cash planning.