⚡ Flash Summary

GEMPACRA has reported a revenue of PKR 466.8 million, representing a 6.3% increase YoY, with costs rising by 9.8% to PKR 313.3 million, partially offset by a dividend from PACRA Analytics. Operating profit remained relatively stable at PKR 153.5 million, while profit after tax increased by 8% to PKR 127.6 million, bolstered by PACRA Analytics. The earnings per share (EPS) is reported at PKR 1.71 with Gem Listing. The company is managing cost while sustaining profitability.

📌 Key Takeaways

• 📈 Revenue grew by 6.3% YoY to PKR 466.8 million.
• 💰 Cost of revenue increased by 9.8% YoY to PKR 313.3 million.
• 📊 Operating profit remained stable at PKR 153.5 million.
• ⭐ Profit after tax increased by 8% to PKR 127.6 million.
• 💸 Earnings per share (EPS) increased by 11% to PKR 1.71.
• 🌱 Modest GDP growth for Pakistan at 2.68%.
• 💼 Successful listing on the Growth Enterprise Market (GEM) Board.
• 🌍 International revenue from services provided by the company was 15,181,401.
• 📊 Consolidated revenue at PKR 487.3 million from 440.9 million.
• ❗ Talent acquisition is a key issue
• 🏛️ Adherence to global standards to deliver higher quality assessments.
• 🤝 PACRA aims to help establish new markets and more rating agencies.

🎯 Investment Thesis

Given the modest revenue growth of 6.3%, rising costs, and various risks related to talent, regulations, and economic conditions in Pakistan, a HOLD recommendation is warranted. Need to see greater operating cash flow before upgrading to Buy.