⏸️ SHNI: HOLD Signal (6/10) – Transmission of Quarterly Report for the period Ended September 30, 2025

📌 Key Takeaways

• 📈 Gross premium increased by 26.4% to Rs. 1,324.50 million (9M2024: Rs. 1,048.14 million).
• ⚠️ Net insurance claims surged to Rs 545.84 million (9M2024: Rs 246.99 million).
• 💰 Business acquisition and management expenses rose to Rs 351.41 million (9M2024: Rs 270.86 million).
• 📉 Investment, rental, and other income declined to Rs 97.65 million (9M2024: Rs. 136.85 million) due to lower policy rates.
• ✅ Profit from Window Takaful Operations (WTO) increased by 6% to Rs 11.67 million (9M2024: Rs 11.03 million).
• ⬆️ Surplus of participants’ Takaful fund rose to Rs 37.25 million (9M2024: Rs 26.28 million).
• ⚠️ Profit before tax decreased to Rs 136.14 million (9M2024: Rs 173.01 million) due to lower investment yields.
• 📉 Net profit after tax declined to Rs 96.66 million (9M2024: Rs 122.84 million).
• 📉 Earnings Per Share (EPS) fell to Rs 1.20 (9M2024: Rs 1.52).
• ✨ Insurer Financial Strength (IFS) Rating upgraded by PACRA from A+ to A++ with ‘Stable’ outlook.
• ⬆️ Authorized Capital increased to Rs. 2.5 billion.
• ⬆️ Paid-Up Capital increased to Rs. 806.25 million following a 25% bonus share issue.
• ⬆️ Shareholder’s Equity grew to Rs. 1.947 billion as at September 30, 2025.

🎯 Investment Thesis

Given the recent earnings decline, coupled with a strong IFS rating, a HOLD recommendation is appropriate. We are revising our price target based on industry multiples. There is growth in the overall business but this is offset by lower investment yields. The time horizon is medium-term.