⚡ Flash Summary

OLP Financial Services Pakistan Limited announced its Q1 2025 financial results, revealing a mixed performance. While revenue increased, profitability declined due to higher expenses and provisions. The company’s balance sheet shows a healthy asset base, but cash flow from operations was negative. Despite challenges, OLP remains a key player in Pakistan’s financial sector.

📌 Key Takeaways

• 📈 Total assets increased slightly from Rs 43.95 billion to Rs 44.94 billion.
• 📉 Revenue increased to Rs 1.57 billion, up from Rs 1.89 billion in Q1 2024.
• ⚠️ Profit before income taxes and levy decreased from Rs 574.29 million to Rs 517.65 million.
• 📉 Earnings per share (EPS) decreased from Rs 1.81 to Rs 1.64.
• ⚠️ Finance costs increased substantially from Rs 824.85 million to Rs 1.22 billion.
• ❗️Cash flow from operating activities was negative at Rs (477.61) million, compared to negative Rs (581.44) million
• ✅ Investments in finance leases decreased from Rs 1.19 billion to Rs (118.10) million.
• ❗️Administrative and general expenses decreased from Rs 459.85 million to Rs 490.56 million.
• ✅ Long-term finances increased from Rs 11.65 billion to Rs 11.64 billion.
• ✅ Short-term investments decreased from Rs 2.34 billion to Rs 2.15 billion.
• ❗️Total equity attributable to equity holders of the Holding Company increased from Rs 10.92 billion to Rs 11.20 billion.
• ⚠️ Non-current liabilities increased from Rs 13.52 billion to Rs 14.12 billion.

🎯 Investment Thesis

Given the mixed financial performance, declining profitability, and negative cash flow, a HOLD recommendation is appropriate. While the company has a strong asset base, the current financial trends raise concerns about future performance. A price target of Rs 1.75 based on current EPS and a price-to-earnings multiple of 1.0 is suggested. The time horizon is medium-term (6-12 months), pending improvements in financial performance.