KTRADE Securities Limited

CREDIT RATING REPORT | Nov-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
21-Nov-25 A- A2 Stable Maintain -
22-Nov-24 A- A2 Stable Maintain -
22-Nov-23 A- A2 Stable Maintain -
22-Nov-22 A- A2 Stable Maintain -
22-Nov-21 A- A2 Stable Upgrade -
About the Entity

KTrade Securities Limited was incorporated on April 25, 2013, as a public unlisted company. The Company operates through seven branches across major cities, including Karachi (Head Office), Lahore, Islamabad, and Multan, serving a diverse retail and institutional clientele. KTrade offers a comprehensive range of financial services, including equity brokerage, advisory, and research, supported by a strong digital presence through its mobile application “KASB KTrade.” The majority shareholding (~60%) is held by Oxford Frontier Capital Limited, primarily owned by Mr. Muhammad Ali Farid Khwaja (Chairman). Other key shareholders include Ms. Mubashira Bukhari Khwaja (~20%), Mr. Mahmood Ali Shah Bukhari (CEO, ~15%), and minor shareholders. The Company’s governance framework is overseen by an experienced Board, while day-to-day operations are managed by a qualified team focused on innovation, client servicing, and sustainable growth.

Rating Rationale

KTrade Securities Limited (“KTrade” or “the Company”) primarily focuses on equity brokerage services, complemented by advisory and research-driven income streams. The Company’s client base remains predominantly retail, with ongoing efforts to increase penetration in institutional and corporate segments. Pakistan’s macro landscape showed improved stability through FY25 and 1QFY26, marked by controlled inflation, a steady exchange rate, and continued progress under IMF reforms. Real GDP grew by ~2.7% in FY25, while inflation averaged ~4.5%, enabling the SBP to reduce the policy rate to 11%. Stabilization persisted in 1QFY26, supported by contained inflation (~4.2%), modest PKR appreciation, and stronger external flows. These developments helped sustain investor confidence, increase trading activity at the PSX, and encourage expectations of upcoming IPOs. Against this backdrop, KTrade’s financial performance improved considerably. Operating revenue increased to PKR 615mln in FY25 (FY24: PKR 206mln), up ~198% YoY, driven by growth in brokerage and advisory income. Profit after tax rose to PKR 227mln (FY24: PKR 36mln), reflecting ~530% YoY growth. The equity base rose to PKR 804mln, by the inclusion of non-convertible, non-cumulative preference shares amounting to PKR 150mln, supporting an improved capital buffer. KTrade’s liquidity position remains adequate, with current assets of PKR 2,876mln against current liabilities of PKR 2,195mln. Short-term investments of PKR 162mln remain within the Company’s defined market risk limits and aligned with its risk appetite framework, ensuring financial flexibility while keeping exposure at a manageable level. The ownership profile remains stable, led by Oxford Frontier Capital Limited (~60%), followed by Ms. Mubashira Bukhari Khwaja (~20%) and Mr. Mahmood Ali Shah Bukhari (~15%). The Board comprises experienced members, including three independent directors, supported by four board-level committees that strengthen oversight and timely decision-making. Key functional areas include Research, Sales, Customer Support, Compliance, Risk Management, HR, Finance, Corporate Finance, Product Development, and Marketing. The Company recently integrated its platform with JazzCash, enabling seamless wallet-based fund transfers for clients. This initiative is expected to improve accessibility, promote digital inclusion, and help expand the retail investor base. KTrade holds a market share of ~3.5% (value traded basis), reflecting its position as a notable player within the brokerage industry. The control environment is considered adequate, with defined procedures, segregation of duties, and consistent compliance monitoring.

Key Rating Drivers

Going forward, maintaining diversified income streams, strengthening market presence, and ensuring stable revenue and profitability will be crucial. Simultaneously, it remains important to uphold sound internal controls, retain key management personnel, and effectively manage potential risks to sustain long-term growth.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

KTRADE Securities Limited

rating analysis

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Profile
Background

KTrade Securities Limited (“KTrade” or “the Company”) was incorporated as a Public Unlisted Company on April 25, 2013. The Company operates as a Trading Right Entitlement Certificate (TREC) holder of the Pakistan Stock Exchange Limited (PSX) and holds membership of the Pakistan Mercantile Exchange (PMEX). Over the years, KTrade has evolved into a digitally driven brokerage house, combining traditional brokerage services with innovative fintech integration to broaden retail participation in Pakistan’s capital markets.


Operations

KTrade operates through seven branches across major cities of Pakistan, including Karachi (Head Office), Lahore, Islamabad, and Multan, ensuring extensive nationwide coverage.

The Company’s core business activities comprise:

  • Equity brokerage services

  • Advisory and research offerings

  • Commodity trading

The KASB KTrade mobile application serves as a key growth engine, offering users a seamless trading interface, market insights, and real-time execution capabilities. This digital platform has significantly enhanced KTrade’s retail client base, supporting its vision of financial inclusion and market accessibility. Recent strategic integrations such as the JazzCash partnership are expected to further streamline fund transfers, simplify account funding, and expand retail onboarding, thereby improving operational efficiency and client convenience.


Ownership
Ownership Structure

KTrade’s shareholding is led by M/s Oxford Frontier Capital Limited, which holds approximately 60% of the Company’s equity. Oxford Frontier Capital is primarily owned by Mr. Muhammad Ali Farid Khwaja, who also serves as the Chairman of KTrade.

Other key shareholders include:

  • Ms. Mubashira Bukhari Khwaja: ~20%

  • Mr. Mahmood Ali Shah Bukhari (CEO): ~15%

  • Minor shareholders: ~5%

This concentrated shareholding pattern ensures strong sponsor control and strategic continuity, with sponsors possessing both financial strength and international market exposure.


Stability

Oxford Frontier Capital is the major shareholder of the Company whose majority shareholding lies with Mr. Muhammad Ali Farid Khwaja. Oxford Frontier Capital is a management consultant firm based in London, United Kingdom. The firm has experience in building, advising, and investing in technology companies that have scaled globally. Oxford Frontier Capital caters to financial technology industries. The firm is providing equity support to the Company to boost its growth. Also the sponsors’ willingness to inject additional capital if required underscores financial backing and commitment to long-term growth.


Business Acumen

Mr. Muhammad Ali Farid Khwaja, the Company’s Chairman, brings over 15 years of international experience in equity research and investments. Having served as a top-ranked Technology Analyst at global institutions such as Berenberg and UBS, and being an alumnus of Georgetown Leadership Seminar and the University of Oxford, he provides strategic direction rooted in global best practices. Mr. Mahmood Ali Shah Bukhari, the CEO, complements this expertise with strong operational insight and leadership in local capital markets. The management’s collective vision continues to emphasize innovation, client engagement, and technological advancement.


Financial Strength

The sponsors possess substantial net worth and are consistently injecting capital into the Company in line with the growing scale of operations. This also reflects their commitment to support the Company in the event of any financial requirements.


Governance
Board Structure

The Board of Directors comprises five members, providing strategic oversight, risk management, and long-term policy direction. The Board reflects a balanced mix of executive and independent representation, ensuring transparency and accountability in governance practices.

Board Members:

  1. Mr. Muhammad Ali Farid Khwaja – Chairman

  2. Mr. Mahmood Ali Shah Bukhari – Chief Executive Officer

  3. Ms. Marium Farid Khwaja – Independent Director

  4. Ms. Sara Saeed – Independent Director

  5. Mr. Faisal Aftab – Independent Director

The Board is supported by three independent directors, enhancing objectivity and independence in decision-making.


Members’ Profile

The Board of Directors comprises seasoned professionals with extensive, diverse experience in their respective fields, ensuring effective oversight and strategic management of the Company’s operations. Leading the board is Mr. Muhammad Ali Farid Khwaja, a distinguished professional with over 15 years of expertise in equity research and investments. He has held top-ranked positions as a Technology Analyst in Europe with prestigious institutions such as Berenberg and UBS. He is also an alumnus of the Georgetown Leadership Seminar and the University of Oxford, further strengthening the board’s leadership profile.



Board Effectiveness

To uphold strong governance standards, KTrade has established four dedicated Board Committees:

  1. Audit Committee

  2. Risk Management Committee

  3. Human Resource & Remuneration Committee

  4. Nomination Committee

These committees ensure enhanced transparency, accountability, and compliance with SECP’s corporate governance framework.


Transparency

KTrade’s external audit is conducted by BDO Ebrahim & Co., Chartered Accountants, an A-Category firm on the State Bank of Pakistan’s panel of auditors, reflecting high professional credibility. The appointment of a top-tier audit firm underscores management’s commitment to transparency and strong financial reporting.


Management
Organizational Structure

The Company maintains a well-defined organizational framework encompassing multiple specialized functions that collectively support its strategic and operational goals. Key functional areas include Research, Sales, Customer Support, Compliance, Risk Management, Human Resources, Finance, Corporate Finance, Product Development, and Marketing. All departmental heads report directly to the Chief Executive Officer (CEO), promoting centralized oversight, coordinated decision-making, and swift execution across the organization.


Management Team

The Company is led by a highly experienced management team with diverse qualifications, including CFA, ACCA, and postgraduate degrees. With 8 to 25 years of industry experience across key functions, the leadership of the CEO and Chairman, each with over 15 years of experience, provides strong strategic direction and operational oversight.


Management Effectiveness

KTrade’s management demonstrates strong strategic oversight and operational efficiency under the leadership of Mr. Mahmood Ali Shah Bukhari (CEO) and Mr. Muhammad Ali Farid Khwaja (Chairman). The team has successfully driven growth through revenue diversification, digital expansion, and cost optimization. To ensure structured decision-making, KTrade has established multiple management committees, including the Risk Management Committee and the Management Committee, comprising the CEO and departmental heads. These committees promote cross-functional coordination and effective execution of strategic objectives, reinforcing overall management effectiveness.


Control Environment

KTrade maintains a strong control environment supported by automated front-end and back-end systems that ensure accuracy, transparency, and real-time monitoring of transactions. The Risk Management and Compliance departments closely oversee trading activities, client exposures, and regulatory compliance. In addition, the internal audit function operates independently, ensuring continuous evaluation of internal controls and adherence to SECP and PSX regulations. This framework collectively strengthens operational integrity and risk management across all business functions.


Business Risk
Industry Dynamics

The brokerage industry in Pakistan has witnessed a significant turnaround during FY25, driven by improved investor confidence, stabilizing macroeconomic indicators, and supportive monetary policies. The KSE-100 Index surged by nearly 60% year-on-year as of June 2025, marking one of the strongest performances in recent years. This growth was further supported by increased trading volumes, enhanced retail participation, and the digital transformation of trading platforms, which expanded accessibility across the investor base. Despite these favorable developments, the sector continues to face challenges from elevated market volatility, regulatory changes, and geopolitical uncertainties, which could influence investor sentiment. Nonetheless, the industry’s gradual shift toward advisory-based and digital investment services positions it for sustainable growth in the medium term.


Relative Position

KTrade holds a market share of approximately 3.5% on a value basis, positioning it as a notable and growing player in Pakistan’s brokerage industry. The Company continues to strengthen its market presence through expansion of its digital trading platform (KASB KTrade App) and an increasing retail client base. Its focus on technology-driven solutions, research-backed advisory services, and enhanced customer engagement has further reinforced its competitive standing among leading brokerage houses.


Revenues

KTrade’s revenue profile primarily comprises fee-based income from brokerage and advisory services, supplemented by non-fee-based income. During FY25, the Company’s operating revenue increased significantly to PKR 615mln (FY24: PKR 206mln), reflecting an impressive 198% YoY growth, driven by higher market activity, a 60% increase in the KSE-100 Index, and an expanding retail investor base. In addition, advisory income witnessed substantial traction, increasing by approximately 835% YoY, indicating successful diversification beyond traditional brokerage operations. The Company’s non-fee-based income also improved to PKR 198mln (FY24: PKR 179mln), supported by gains on short-term investments and other ancillary income streams. Consequently, profit after tax rose sharply to PKR 227mln (FY24: PKR 37mln), reflecting strong operational efficiency and effective execution of its digital and advisory growth strategy.


Cost Structure

KTrade’s operating and administrative expenses stood at PKR 530mln during FY25 (FY24: PKR 333mln), reflecting the Company’s business expansion, technology integration, and higher operational activity. The rise in costs is primarily attributed to increased marketing expenditure, platform enhancement, and human resource strengthening to support the growing client base and advisory operations. Despite the higher expense base, the Company achieved significant improvement in profitability, driven by strong revenue growth and enhanced operating leverage. Going forward, maintaining cost efficiency while expanding operations will remain key to sustaining profitability margins.


Sustainability

KTrade continues to strengthen its business sustainability by focusing on revenue diversification and digital innovation. The Company is actively expanding its advisory and research-based income streams, reducing reliance on traditional brokerage revenue. The recent integration with JazzCash is expected to enhance financial inclusion, retail participation, and transaction convenience, further supporting client growth. Additionally, continuous investment in technology, talent development, and customer engagement reflects management’s long-term commitment to building a resilient and scalable business model capable of sustaining growth across varying market cycles.


Financial Risk
Credit Risk

KTrade follows a well-defined risk management framework to monitor client exposures and mitigate potential credit losses. The Risk Management Department conducts daily margin monitoring through an integrated system that provides real-time alerts on client shortfalls and exposures. This enables timely intervention and strict adherence to SECP and PSX regulations regarding margin maintenance and exposure limits. Additionally, client securities are held in segregated CDC accounts, ensuring transparency and protection of client assets. The Company maintains a conservative risk appetite, avoiding undue exposure to high-risk clients and continuously reviewing internal risk controls to ensure prudent management of counterparty and settlement risks.


Market Risk

KTrade’s exposure to market risk primarily arises from fluctuations in equity and commodity markets. The Investment and Risk Management Committees regularly review market positions, ensuring that exposures remain within defined risk thresholds. The Company’s short-term investments, largely comprising money market mutual funds (0.2%) and listed securities. Overall, KTrade’s disciplined investment approach and active oversight mechanisms mitigate market volatility risks and preserve financial stability.


Liquidity Risk

The Company maintains a healthy liquidity profile. As of FY25, current assets stood at PKR 2,876 million, against current liabilities of PKR 2,195 million, reflecting a comfortable liquidity cushion. The liquid capital balance of PKR 531 million further strengthens the Company’s capacity to meet short-term obligations. Additionally, the presence of short-term investments, mainly in money market mutual funds and listed securities, provides financial flexibility and supports the Company’s ability to manage liquidity requirements efficiently.


Capital Structure

KTrade maintains a strong capitalization profile, supported by an equity base of PKR 804 million as of FY25, reflecting a notable 88% year-on-year growth. The Company remains debt-free on a long-term basis, indicating a conservative financial strategy and limited leverage exposure. The healthy equity base, coupled with a liquid capital balance of PKR 531 million, enhances the Company’s risk absorption capacity and provides a solid financial cushion to support future business expansion.
 
 

Nov-25

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KTRADE Securities Limited

financial summary

(PKR mln)

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Sep-25
3M		 Jun-25
12M		 Jun-24
12M		 Jun-23
12M
Management Audited Audited Audited
A. BALANCE SHEET
1. Finances 0 0 0 0
2. Investments 653 183 35 140
3. Other Earning Assets 42 527 332 152
4. Non-Earning Assets 4,932 2,292 705 407
5. Non-Performing Finances-net 0 0 0 0
Total Assets 5,627 3,001 1,072 700
6. Funding 3,685 1,007 333 260
7. Other Liabilities (Non-Interest Bearing) 901 1,190 312 49
Total Liabilities 4,585 2,197 645 309
Equity 1,041 804 427 391
B. INCOME STATEMENT
1. Fee Based Income 217 615 206 87
2. Operating Expenses (161) (530) (333) (226)
3. Non Fee Based Income 153 198 179 6
Total Opearting Income/(Loss) 209 284 51 (133)
4. Financial Charges (1) (2) (1) (1)
Pre-Tax Profit 208 282 51 (134)
5. Taxes (17) (55) (14) (1)
Profit After Tax 191 227 37 (135)
C. RATIO ANALYSIS
1. Cost Structure
Financial Charges / Total Opearting Income/(Loss) 0.3% 0.5% 1.3% -0.7%
Return on Equity (ROE) 163.3% 55.0% 19.3% -34.6%
2. Capital Adequacy
Equity / Total Assets (D+E+F) 18.5% 26.8% 39.8% 55.8%
Free Cash Flows from Operations (FCFO) / (Financial Charges + Current Maturity of Long Term Debt + Uncovered Short Term Borrowings) -32059.0% -17653.2% 9179.2% 19763.3%
3. Liquidity
Liquid Assets / Total Assets (D+E+F) 73.4% 40.7% 52.7% 52.5%
Liquid Assets / Trade Related Liabilities 112.1% 134.7% 169.4% 141.2%
4. Credit & Market Risk
Accounts Receivable / Short-term Borrowings + Advances from Customers + Payables to Customers 78.4% 70.5% 63.3% 110.9%
Equity Instruments / Investments 96.8% 88.7% 60.4% 15.2%

Nov-25

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KTRADE Securities Limited

rating scale

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Nov-25

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KTRADE Securities Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
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    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
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Nov-25

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