Dawood Equities Limited

RATING REPORT | Sep-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
18-Sep-26 A- A2 Stable Maintain -
19-Sep-25 A- A2 Stable Maintain -
19-Sep-24 A- A2 Stable Maintain -
19-Sep-23 A- A2 Stable Maintain -
20-Sep-22 A- A2 Stable Maintain -
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. The primary shareholder, Mr. Ayaz Dawood, holds ~19% ownership in the company. B.R.R. Investment (Pvt.) Limited and Equity International (Pvt.) Limited hold stakes of ~10% and 15%, respectively while Mr. Junaid Dada owns 7% of shareholding. The remaining ~49% of the company's shares are free float, held by individual and institutional investors. 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).

Rating Rationale

Dawood Equities Limited ('DEL' or 'the Company') is engaged principally in equity brokerage, with underwriting and consultancy services rendered ancillary. The client franchise remains concentrated within the Retail and HNWI segments, while the Company pursues deeper penetration of the Institutional/Corporate space. DEL's business and financial risk profiles remain closely tied to secondary market activity, given the transaction-based nature of brokerage revenue. The KSE-100 Index sustained a second consecutive year of pronounced growth, returning approximately 89% in FY24 to 78,445 points and approximately 60% in FY25 to 125,627 points, before extending this momentum into the first half of FY26, closing calendar year 2025 at 174,054 points and briefly touching a peak of approximately 189,167 points in late January 2026. Thereafter, the index corrected sharply, weighed by the Federal Constitutional Court's upholding of the super tax, heightened security concerns in Balochistan and Khyber Pakhtunkhwa, an unchanged monetary policy stance, escalating Pakistan-Afghanistan tensions, and the spillover of the United States-Israel-Iran conflict into the broader Middle East, compounded by global oil supply disruption, even as the exchange concurrently transitioned to T+1 settlement. Domestic macro fundamentals, exchange rate stability, and IMF programme progress have since improved, but the equity market's continuing susceptibility to Middle East developments suggests that volatility, rather than the elevated volumes of the preceding period, may increasingly define the near-term backdrop against which DEL's revenue sustainability will be tested. Brokerage income, DEL's principal revenue driver, rose 55.8% year-on-year to ~PKR 275mln as at Mar'26 (SPLY: ~PKR 177mln), translating into a 70% increase in net profit to ~PKR 82mln (SPLY: ~PKR 48mln), led by higher brokerage income and underwriting commissions. DEL maintains an adequate equity base of ~PKR 457mln, with current assets of ~PKR 760mln against current liabilities of ~PKR 346mln, supporting an adequate liquidity profile. The Company's proprietary trading exposure, the fair-value-through-profit-or-loss listed-securities component of its short-term investments, rose 69.5% to ~PKR 77mln (SPLY: ~PKR 45mln), equivalent to approximately 17% of equity, a market-risk exposure whose relevance is heightened, rather than diminished, by the more volatile environment now anticipated. Ownership is stable, underpinned by the sponsor's business acumen; ratings derive comfort from an experienced management team, adequate client servicing, and a satisfactory control framework, with scope to deepen research capacity. DEL's expansion of its branch footprint through a franchising model offers a partial, structural counterweight to revenue concentration, though its contribution to diversification remains to be demonstrated.

Key Rating Drivers

Going forward rating will depend on income diversification, resilient revenue and profitability through the anticipated volatility, disciplined sizing and monitoring of proprietary exposure, and continued strengthening of internal controls and key personnel retention.

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

Dawood Equities Limited


Rating Analysis

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Profile
Background

The Company was incorporated in May 2006, as a public unlisted company, later on converted into public listed company in 2008. In January 2017, the Company obtained registration as an underwriter with SECP.


Operations

With its head office in Karachi, Dawood Equities operates through PSX registered branches located in Karachi, Hyderabad, Lahore, and Faisalabad. Following its expansion strategy, the Company has established a new PMEX registered branch in Multan and Sargodha. The Company primarily offers the services of Equity Brokerage and also provides the services of Underwriting, Corporate Finance & Financial Advisory, and Research.


Ownership
Ownership Structure

The Company, being a listed entity, the ownership stakes are divested between different entities and individuals, out of which Mr. Ayaz Dawood, the primary sponsor, owns ~19% stakes in the Company, followed by Equity International (Pvt.) Limited (~15%), B.R.R. Investment (Pvt.) Ltd. (10%), while Mr. Junaid Dada owns 7%.The remaining ~49% of the company's shares are free float, held by individual and institutional investors.


Stability

The Dawood Family Group is counted amongst the largest business groups in the country, and has a diversified investment portfolio.


Business Acumen

The business acumen is strengthened by the entrepreneurial and business skills of Mr. Ayaz Dawood. He is the CEO of BRR Guardian Modaraba and Chairman of Dawood Family Takaful Limited.


Financial Strength

The primary sponsor has sizeable financial strength due to his linkage with the Dawood Group, which has sizeable shareholding different companies operating in diverse sectors such as fertilizers, securities & commodities brokerage, corporate advisory, asset management, cement, power and real estate development sectors.


Governance
Board Structure

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). The Board is chaired by Mr. Junaid Dada, an independent director.


Members’ Profile

All the directors are seasoned professionals and possess manifold experiences in the relevant fields. The Chairman, Mr. Junaid Dada holds diploma in business management from Santana Monica College, California. He is also the Chief Executive Officer (CEO) of Electricity Power Limited and United Sales Private Limited.


Board Effectiveness

Dawood Equities has two board committees, namely i) Audit Committee and ii) HR and remuneration committee. Audit committee meets on quarterly basis to review the financial statements and internal audit findings.


Transparency

The Company's external auditors are M Yousuf Adil & Company Chartered Accountants. The firm is QCR rated by ICAP and is in the A category of SBP's panel of auditors.


Management
Organizational Structure

The organizational structure is aligned with the business operations, and all necessary departments are present. Within this structure the branch managers, Settlement Department, Research, and Customer Support report to the Company’s Chief Operating Officer (COO). The COO reports to the CEO of the Company. CEO and CFO are accountable to the Board. The Internal Auditor reports to the Board Audit Committee which enhances the internal controls.


Management Team

Mr. Abdul Aziz Habib, the CEO of the Company, holds M.A. degree in Economics. He is a seasoned professional and has more than a decade experience of brokerage business. Mr. Salman Yaqoob is the CFO and Company Secretary of the Company. He is an Associate member of Institute of Certified Chartered Accountants & Institute of Corporate Secretaries of Pakistan. He has more than 13 years of financial and corporate experience especially in NBFC’s, Modaraba, Insurance and Brokerage business.


Management Effectiveness

The Company has an integrated front and back office system which provides the Company with System generated real-time based-MIS reports, adding more efficiency in decision making.


Control Environment

The Company has an outsourced internal auditor Reandra Haroon Zakaria & Company, which implements and monitors the policies and procedures of the Company, while the separation of the risk management and compliance function would have improved the control framework further.


Business Risk
Industry Dynamics

The KSE-100 Index continued its strong upward trajectory in FY26, reaching successive record highs and reflecting sustained investor confidence. The market remained supported by improving macroeconomic conditions, easing interest rates, stronger foreign exchange reserves, and continued progress under the IMF program. The decline in the policy rate during FY26 further encouraged a gradual reallocation from fixed-income instruments toward equities, supporting trading activity and market liquidity. Consequently, the brokerage industry benefited from higher trading volumes, increased investor participation, and stronger transaction-based revenues. Going forward, the sector’s growth will remain dependent on the sustainability of macroeconomic stability, political developments, interest-rate direction, and the continuation of supportive economic and market policies.


Relative Position

The Company primarily caters to HNWIs and Retail clientele, while corporate clientele are also present. Dawood Equities Limited has an average market share of ~1.1% during 9MFY26 on traded volume basis.


Revenues

The Company's brokerage income is the primary source of topline. The brokerage income stood at ~PKR 275mln as at Mar '26 while it was ~PKR 177mln in SPLY. During 9MFY26, earned a net profit of ~PKR82mln (SPLY: ~PKR 48mln).


Cost Structure

The Company’s cost structure primarily comprises administrative expenses and operational costs. Administrative expenses increased to ~PKR 57mln as at Mar’26 from ~PKR 46mln in SPLY, reflecting a ~24% YoY increase, while operational costs declined to ~PKR 0.4mln from ~PKR 2.2mln.


Sustainability

The Company is planning to further enhance its geographical presence, as evidenced by the operational branches in Faisalabad and Sargodha, while a new branch is currently under development in Multan. Furthermore, the plan is to increase their revenue diversification further by boosting their underwriting income.


Financial Risk
Credit Risk

Dawood Equities has due diligence procedures in addition to its KYC, for the assessment of its client’s creditworthiness. The Board has approved per party and per script limits, which are strictly adhered to by the management which minimizes the credit risk.


Market Risk

Dawood Equities established a formal Investment Policy document (IPS) for its proprietary book approved by the BoD - addressing exposure in different avenues. At end-Mar '26, the proprietary book of the Company stood at ~PKR 77mln, constituting ~17% of equity.


Liquidity Risk

At end-Mar '26 the current assets of the Company stood at ~PKR 760mln against the current liabilities of ~PKR 346mln. The Company has an adequate liquidity profile.


Capital Structure

The Company's Liquid Capital Balance (LCB) stood at ~PKR 173mln at end-Mar '26. The equity of the Company stood at ~PKR 457mln at end-Mar '26.
 
 

Sep-26

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Dawood Equities Limited


Financial Summary

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(PKR mln)


 Mar-26
9M		 Jun-25
12M		 Jun-24
12M		 Jun-23
12M
Management Audited Audited Audited
A. BALANCE SHEET
1. Finances 17 17 12 12
2. Investments 157 123 80 57
3. Other Earning Assets 1 4 2 8
4. Non-Earning Assets 636 650 379 281
5. Non-Performing Finances-net 0 0 0 0
Total Assets 811 794 474 358
6. Funding 333 328 179 92
7. Other Liabilities (Non-Interest Bearing) 21 95 0 12
Total Liabilities 354 423 180 104
Equity 457 371 294 254
B. INCOME STATEMENT
1. Fee Based Income 170 134 133 44
2. Operating Expenses (58) (68) (105) (51)
3. Non Fee Based Income 2 11 31 1
Total Opearting Income/(Loss) 114 77 58 (6)
4. Financial Charges (8) (8) (12) (8)
Pre-Tax Profit 106 69 46 (14)
5. Taxes (24) (22) (12) (6)
Profit After Tax 82 47 34 (20)
C. RATIO ANALYSIS
1. Cost Structure
Financial Charges / Total Opearting Income/(Loss) 7.1% 10.2% 21.3% -124.2%
Return on Equity (ROE) 64.9% 28.2% 28.2% -15.2%
2. Capital Adequacy
Equity / Total Assets (D+E+F) 56.4% 46.7% 62.1% 70.9%
Free Cash Flows from Operations (FCFO) / (Financial Charges + Current Maturity of Long Term Debt + Uncovered Short Term Borrowings) -16.1% -10.1% -81.3% 33.8%
3. Liquidity
Liquid Assets / Total Assets (D+E+F) 72.3% 50.1% 55.7% 60.4%
Liquid Assets / Trade Related Liabilities 450.1% 176.0% 197.8% 807.9%
4. Credit & Market Risk
Accounts Receivable / Short-term Borrowings + Advances from Customers + Payables to Customers 133.9% 89.8% 115.0% 197.6%
Equity Instruments / Investments 97.6% 96.7% 94.5% 91.6%

Sep-26

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Dawood Equities Limited


Rating Scale

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Sep-26

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Dawood Equities 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.
  2. Restrictions
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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
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
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