Sitara Petroleum Service Limited ("Sitara Petroleum" or "the Company") is a Public Unlisted concern incorporated in July 2012 under the repealed Companies Act 2017.

Originally, two separate firms operated: Lalpur Carriage, providing logistics services to Oil Marketing Companies (OMCs), and Sitara Petroleum, focused on wholesale and direct sales of petroleum, oil, and lubricants (POL) products. The management later merged these firms into one entity, Sitara Petroleum Services Limited, to create a unified organizational structure.

The Company primarily trades and distributes Diesel, Petrol, and Lubricants, while also offering fleet logistics services to Gas & Oil Pakistan Limited. The Company is currently operating ~60 fuel stations, with 8 under construction, and operates a feet of 400 oil tankers with ~100 leased oil tankers. The registered office is located in Gulberg-II, Lahore.

Sitara Petroleum is owned by brothers; Mr. Tahir Iqbal, and Mr. Javed Iqbal. The majority shareholding has been transferred to the next generation, whereby Mr. Tahir Iqbal’s three sons (Hassan Bilal, Huzaifa Bilal, and Muhammad Ali) and Mr. Javed Iqbal’s three sons (Usman Javed, Hassan Javed, and Siddique Javed) each hold ~14.83% stake in the Company, making ~90% of the ownsership concentrated in them.

Sitara Petroleum has gained susbtantial stability given its affiliation with Gas & Oil Pakistan, and indirectly, with Aramco. This strengthens their supply chain as well as allows them to reap the benefit of better credit terms, overall increasing its perforrmance and standing.The Sponsors are inducting the next generation gradually into business. The succession planning however is not formally documented but implied.

The sponsors possess extensive experience and expertise in the oil sector. Their strong business acumen has contributed significantly to the Company’s sustained success over the years. They bring industry-specific knowledge and strategic thinking capabilities to the organization.

The Sponsor Company is part of one the largest clongomerate in Pakistan with an expected turnover of ~$ 3bln and signicant financial muscle. 

The Company has a seven-member Board (including the CEO). The Board comprises one Executives, three Independent and three Non-Executive Directors. 

Mr. Zafar Iqbal Ch., an Independent Director, chairs the Board since 2021 with an experience of above two decades. He is an expert industrialist and former President of the Sahiwal Chamber of Commerce and Industry. He is a former Senator and business leader with public policy and strategic development experience. Mr. Hasan Ahmed, an Independent Director, is a finance leader with 20+ years of  IPO, restructuring and strategic growth experience. Ms. Toshiba Sarwar, an Independent Director, is a veteran business consultant and image strategist with more than two decades of entrepreneurial and corporate branding experience. All other Board members have significant knowledge and expertise to facilitate the decision making process.

The Board has two committees: (i) Audit Committee and (ii) Human Resource & Remuneration Committee. The Board meets quarterly, and meeting minutes are properly documented.

The Company has appointed M/s Ilyas Saeed & Co. Chartered Accountants. as its external auditor. They have expressed unqualied opinion on fnancial statements FY25.

A simplied organizational structure exists at the Company. The business prole is segregated into four different departments, which are headed by their respective heads, resulting in effective control and management.: (i) Operations, (ii) Finance, (iii) Sales, and (iv) Transport. All the heads report to the CEO.

Mr. Zaheer Baig has been appointed as the new CEO. Zaheer Baig has an overall experience of 40 years, which spans in oil, gas, and energy industry, he also brings prior experience from the National Bank and NLC. Mr. Abdur Rehman Butt, who serves as the CFO of the Company, is a seasoned finance profesional with 20 years of experiance both internationally and locally in financial management, corporate finance, and financial management. Mr. Wajahat Ali Syed, Head of Retail & Non-Fuel Revemue, is a seasoned professional having oil and gas industry experience of more than two decades. He is MBA from IBA Karachi and has experience in PSO, Attock Petroleum Ltd., Army Welfare Trust, and BYCO. Most of the senior management is associated with the Company for a long time and has sufcient experience to make strategic decisions.

The Company has constituted two committees comprising members of the management team namely (i) Procurement and (ii) Retail Development Committee. The purpose of the Procurement Committee is to streamline the procurement process, establish effective controls and ensure efciency in procurement activities while the Retail Development Committee ensures ‘Retail Side’ of the business is pursuing growth and precise strategies are being devised in the right direction.

The Company has been using an ERP system based on Oracle RDBMS since Jan'12. It operates various modules and generates reports as needed. The IT infrastructure is effectively integrated with all departments, ensuring proper nancial and operational control.

The Company has an effective in-house internal audit department which helps to improve risk management, control, and governance processes and brings improvement to business practices by forming SOPs.

Oil Marketing Companies (OMCs) in Pakistan started CY25 with a significant rebound in sales, recording a YoY growth of ~32% during 4MCY25. This upward trajectory continued, with sales increasing by ~7% YoY during 8MCY25, compared to the same period last year (SPLY). Despite the sustained growth in industry-wide sales volumes, many players experienced a decline in market share. Furnace Oil (FO) also saw a strong rebound, with volumes surging by 182% YoY. HSD demand received an additional boost from a ~3% price reduction, which helped drive total industry sales volumes to 1.3mln tons in August 2025, reflecting a ~7% YoY increase for the month. However, the recent government decision to increase the prices of both HSD and Petrol by Rs 4 per liter (effective October 1, 2025), coupled with rising inflation of ~5.6% in September 2025, may dampen the growth momentum observed earlier in the fiscal year.

Among key competitors, Sitara Petroleum significantly outperformed the industry, recording ~198% YoY sales growth in FY25 across 60 outlets. In contrast, Aslam Energy reported a ~27% YoY decline in sales across 44 outlets. Sitara Petroleum also demonstrated strong profitability, posting a net profit of PKR 3,250mln with a net margin of ~3%, whereas Aslam Energy reported a modest net profit of PKR 37mln and a margin of ~0.1%, reflecting weaker operational performance and market positioning.

Sitara Petroleum reported a strong turnaround in FY25, posting ~198% sales growth compared to a ~16% decline in the previous year(FY24. Revenue rose sharply to PKR 121,947mln from PKR 40,931mln, driven by robust volume growth consistent with the performance trend of its associated OMCs, i.e., GO. High-Speed Diesel (HSD) remained the key product, contributing ~59% of total sales, with ~90% of this volume sold within Punjab. This indicates a high regional concentration and continued dependence on a single market for the bulk of the Company’s operations. Sitara Petroleum's revenue is projeted to grow by ~19% by FY26, and by FY28, it is projected to grow upto ~56%, in comaprison to its current standing. 

The improvement in Sitara Petroleum’s margins appears to be supported by a substantial supply of POL products from GO, benefiting from its affiliation with Aramco. This arrangement has enhanced the Company’s overall business margins. Consequently, Sitara Petroleum’s gross margin increased slightly from ~4.4% in FY24 to 4.5% in FY25, while the net profit margin rose more notably from ~0.5% to ~2.7%, reflecting both the improved supply dynamics and better expense management. Owing to this affiliate relatopnship, Sitara Petroleum's gross margins are expected to grow at CAGR of ~25% per year, and its net profits are expected to grow at a CAGR of ~26% per year, by FY30.

Sitara Petroleum plans to strengthen its governance and operations by pursuing an Initial Public Offering (IPO), involving ~20% equity dilution. The IPO proceeds will fund expansions, including ~ 35 new retail outlets, the acquisition of 50 oil lorries, and the construction of 40,000 MT of storage capacity. The remaining will be met using internal cash flows and long-term debt, ensuring the debt level remain below ~40% of the total requirement. If executed effectively, these initiatives, supported by continued operational and logistical assistance from GO, are expected to significantly enhance the Company's financial performance and solidify its position in the OMC supply chain.

Sitara Petroleum’s short-term trade leverage position improved from ~35% in FY24 to ~73% in FY25, reflecting enhanced borrowing cushion. The Company’s net working capital cycle improved as average working capital days reduced from 18 days to 12 days, indicating stronger cash flow management and operational efficiency. 

EBITDA/Finance cost in FY25 was 4.9x from 1.4x SPLY, indicating strong operational efficiency and significantly improved ability to cover finance costs from its core operations. Liquidity cover/Finance Cost for SitaraPetroleum in FY25 was 20.2x from 0.5x SPLY, indicating enhanced liquidity position and improving its ability to cover its obligations. 

Sitara Petroleum remains notably leveraged, with borrowings accounting for ~50% of its total funding. Total borrowings increased by ~110%, reaching PKR 8,778mln in FY25, up from PKR 4,171mln in FY24. This rise was primarily driven by a sharp increase in long-term borrowings, which increased to PKR 5,568mln from PKR 1,114mln SPLY. In contrast, short-term borrowings declined by ~16%. Sitara Petroleum's equity also saw an uptake of ~60%, despite its paid-up capital remaining unchanged, as the increase was largely attributable to unappropriated profits [FY25: PKR 19,825mln, FY24: PKR 11,832mln]. In line with the current standing and substantial support of its affiliate, GO,