Hi-Tech Lubricants Limited (HTL) reported consolidated earnings per share of PKR 0.73 for FY25, compared to loss per share of PKR 0.99 in FY24. Furthermore, in 1QFY26, the company reported earnings per share of PKR 0.77, compared to earnings per share of PKR 0.14 in the same period last year (SPLY). The decline in financial performance in prior years was primarily driven by the company’s inability to maintain price competitiveness, as it relied on importing fully finished premium products during a period of PKR devaluation.
This resulted in low sales volumes. For FY26, management guided volumes of more than 12m litres (25% growth vs 9.5m litres in FY25), with a forecasted PAT contribution of PKR 400–500m. In the OMC segment, growth is expected to be supported by new sites, with incremental earnings from new COCO sites estimated at PKR 180–200m. Overall, management provided a conservative profit forecast of PKR 600m. In OMCs, plans include establishing a storage facility in Daulatpur, which is expected to enable licensing for approximately 40 additional fuel stations.
The company is also rationalizing the network by removing underperforming stations and issuing licenses to new, better performing dealers. Within the lubricant portfolio, the premium Grey and Blue series deliver better margins, while the Red series (motorcycle and diesel oils) is a high-volume, price-sensitive category and therefore carries lower margins. The Polymer Division remains at an early stage, but has demonstrated rapid improvement.
Management expects the segment to move into a positive and profitable trajectory in FY26. Historically, HTL imported finished goods at a higher duty rate, while competitors imported raw materials at 10–12%. HTL has now shifted to importing base oil and additives as raw materials for local blending, availing a duty structure benefit. local blending started in July 2025. HTL remains bound under its agreement with South Korea for premium base oils, but intends to re-engage in discussions to potentially source more cost-effective Group I base oil from local refineries for price-sensitive categories such as motorcycle oil and diesel.
Management does not anticipate a near-term material impact from EV adoption in Pakistan, particularly given the dominance of diesel, tractor, and motorcycle segments in volumes, implying the lubricant demand runway remains intact for the next 5–7 years.
Important Disclosures
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