FIRST ASIA SECURITIES
PakistanSri LankaPREV
EquitiesFixed Income
DATA AS OF 13 JUL 2026 · EOD

PSO

Pakistan State Oil
OMCS

LAST · PKR

356.66
+2.36 ▲ +0.67%
P/E 3.8× · YIELD 2.8% · ROE 15.6%

52W RANGE

328.69503.21
16% OF RANGE · YTD −24.7%
01 / PSO — 1 YearAS OF 13 JUL 2026 · EOD
PERIOD 1Y · 250 SESSIONS▼
The Call
BUY+21%
430.00PKR · 12-MO
4.4× FY26E

Volumes recover; settlement edges closer.

Risks to our view
02 /

FAS DESK · FIRST ASIA SECURITIES RESEARCH · 23 JUN 2026 · EOD

Deepest value in the market — for the brave

  1. 01

    Buy, PKR 430 target: at 3.8× — the lowest multiple in coverage — PSO is priced for the circular-debt overhang to never resolve; we think that is too pessimistic.

  2. 02

    The franchise is unmatched: dominant diesel and mogas share with a nationwide retail and storage network.

  3. 03

    The catalyst is cash, not earnings — an IMF-anchored receivables settlement converts trapped profit into distributable cash.

  4. 04

    At ~4.4× our FY26E EPS the target is PKR 430; high-risk, high-reward, sized accordingly.

Where we differ from the street
Street viewOur viewWe change our mind if
Cheap for a reason — the cash never converts.The discount over-prices the risk; a settlement is the asymmetric catalyst, and you are paid to wait through the cycle.Another year of receivable growth with no settlement framework.
OMC margins are regulated and thin.Volume leverage helps; this is primarily a balance-sheet, not a margin, story.A structural OMC-margin cut.
High working capital and gearing are dangerous.Real — PSO is the highest-beta way to play energy reform; size the position for that.A liquidity event or sustained negative operating cash flow.

— FIRST ASIA SECURITIES RESEARCH · NOT INVESTMENT ADVICE