Added to YB: 2026-08-26
Pitch date: 2026-08-23
PPL.KA [bullish]
Pakistan Petroleum Limited
Author Info
Saadiyat Capital has been an investment analyst for various hedge funds in the UK, USA, and Germany (currently in London). Sign up for the newsletter.
Company Info
Pakistan Petroleum Limited, together with its subsidiaries, engages in the exploration, development, and production of oil and natural gas resources in Pakistan, the United Arab Emirates, Iraq, and Yemen.
Market Cap
PKR 654.8B
Pitch Price
N/A
Price Target
270.00
Dividend
3.12%
EV/EBITDA
4.38
P/E
8.30
EV/Sales
2.39
Sector
Oil, Gas and Consumable Fuels
Category
special_situation
Pakistan Petroleum Limited - $PPL.KA
PPL.KA: Base-case FV Rs270 vs Rs237.89 (~8x trailing EPS, 0.84x book); consensus TP Rs265. Variant view: market prices PPL as an option on state settlement of ~Rs600bn (Rs220/sh, >60% of assets) circular-debt receivable owed by insolvent Sui utilities—the reason it trades sub-book despite mid-teens ROE and 60%+ gross margins. Catalysts now live: Rs1.49tn settlement package before Cabinet Committee (19 Aug 2026) implying a Rs80–105/sh special dividend to PPL holders (AHL est.), plus Hormuz closure ending Sui curtailment and raising indigenous gas value. Key risk: prior plans (2023) never converted to cash—>half the funding is avoided LNG cost, not transfers—and at 13.5% ROE vs 17% cost of equity, sub-book is arithmetic, not mispricing, unless cash conversion genuinely improves. Weak oil-price proxy (gas is capped/administered; windfall levy above $40/bbl). Size to the plan failing.
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