daily check

· Volumetric offtakes for POL products showed an increase of 7%YoY during Aug’25, culminating to an increase of 5%YoY during 2MFY26.

· MS and HSD offtakes grew up 8%/14%YoY during Aug’25, attributable to, i) increasing passenger vehicle sales, ii) resumption in traveling demand as educational institutes reopen , and iii) tighter enforcement on fuel smuggling from Iranian borders

· Volumetric sales for PSO stood at 547k tons during the month, up by 4%YoY/8%MoM, culminating to a market share of 42.1%/41.8% during Aug’25/2MFY26

· In summary, we have a ‘BUY’ call for PSO and APL with Dec’25 TP of PkR729/825 per share, with DY of 5.0%/4.9% for FY26E, respectively

OMC offtakes rise by 7%YoY in Aug’25: Volumetric offtakes for POL products showed an increase of 7%YoY during Aug’25, culminating to an increase of 5%YoY during 2MFY26. Consequently, MS and HSD showed an increase of 8%/14%YoY during Aug’25, with the increase possibly attributable to, i) higher passenger vehicle sales during Jul’25 (up 28%YoY) and FY25 (up 43%YoY), ii) resumption in traveling demand as educational institutes reopen following end of summer season, and iii) tighter enforcement on fuel smuggling from Iranian borders. However, heavy rainfall and widespread flooding across Northern and Central regions, including large parts of Punjab, likely contributed to a slowdown in offtakes during the latter part of Aug’25. With regards to HOBC, the premium fuel segment continued to show robust growth, up by 146%/170%YoY during Aug’25/2MFY26 as sale of higher-end SUVs continue to warrant its demand. With regards to JP, the aviation fuel has seen its highest offtakes in two-months of 101k tons since 2MFY18 (134k tons), supported by elevated travel demand during summers. Overall, industry offtakes during 2MFY25 stood at 2.5mn tons (up 5%YoY), with retail volumes (MS, HSD and HOBC) totaling 2.4mn tons (up 10% YoY).

PSO offtakes up 12%YoY: Volumetric sales for PSO stood at 547k tons during the month, up by 4%YoY/8%MoM, culminating to a market share of 42.1%/41.8% during Aug’25/2MFY26. Notably, MS/HSD offtakes stood higher by 4%/10%YoY during the month, with market-share in retail fuel segment amounting to 40.1% (vs. 41.8% in Aug’24). While 2MFY26 offtakes show weakness for PSO (down 2%YoY), we expect PSO to close FY26 volumes with an accretion of 6%YoY from 7.2mn tons posted during FY25.

WAFI volumes remain strong: In the listed space, WAFI volumes have remained the most upbeat during first two months, with volumes rising by 16%/19% during Aug’25/2MFY26., outperforming the industry during the period. Notably, this has elevated the second-largest privately owned OMC’s market-share to 8.2% during Aug’24 (compared to 7.6% in SPLY). However, APL, under our coverage, continues to post subdued sales amid heightened supply-led competition prevalent in the industry, with volumes clocking in at 112k tons, down 1%YoY (down 2%YoY during 2MFY26).

Investment Perspective: We maintain our growth projection of 6%YoY for sector sales during FY26E (compared 7%YoY increase during FY25), led by stable fuel prices alongside recovery in commercial/industrial activity during the year. However, prolonged impact of recent floods may hamper mobility across critical regions, and stand as a risk to our thesis. In summary, we have a ‘BUY’ call for PSO and APL with Dec’25 TP of PkR729/825 per share, with DY of 5.2%/6.4% for FY25E, respectively. Our reasons for liking include anticipated revision in OMC margins during 1HFY26 alongside modest volumetric recovery, while resolution of circular debt is to favorably impact the state-owned OMC i.e. PSO.

 

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