Karachi: The Board of Directors of Sindh Modaraba Management Limited, the management company of Sindh Modaraba, has released the un-audited financial statements for the nine-month period ending March 31, 2025, reporting a decrease in profit after tax. The company recorded a profit of Rs. 142.84 million, down from Rs. 171.60 million in the previous period. The decline is attributed to a significant decrease in the State Bank of Pakistan's policy rate by approximately 50%, which affected the profit before tax.
Despite the reduction in profit, Sindh Modaraba has managed to disburse Islamic Financing Facilities worth Rs. 987.91 million, a substantial increase from Rs. 187.44 million during the same period last year. The financing portfolio also expanded from Rs. 738.913 million to Rs. 1.420 billion. Additionally, the company successfully recovered Rs. 22.49 million from non-performing loans, reflecting a stable financial position supported by effective risk management and Shariah-compliant financing practices.
According to information available from the Pakistan Stock Exchange (PSX), Pakistan's economy is showing signs of recovery, with projected real GDP growth of 2.6% in FY25. This growth is supported by robust private consumption, an improved investment climate, high remittance inflows, and increased credit to the private sector. Growth is expected to rise further in subsequent years, although it will remain constrained by macroeconomic policies aimed at rebuilding fiscal and external buffers.
Inflation is projected to decline to 6.0% in FY25, aided by favorable base effects and lower global commodity prices, before stabilizing around 7% in the medium term. Fiscal consolidation efforts are yielding positive results, with a narrowed fiscal deficit and primary surplus, despite pressures from significant interest payments. On the external front, Pakistan has maintained a current account surplus, driven by growth in exports, strong remittances, and rising foreign investment.
The Large-Scale Manufacturing sector recorded a year-on-year contraction of 1.2%, but month-on-month improvements were observed, particularly in the automobiles, textiles, and tobacco industries. Government initiatives and favorable weather have supported the agriculture sector, contributing to food security and price stability.
Global economic trends, with projected growth of 3.3% in both 2025 and 2026, are likely to influence Pakistan's outlook. A decline in global inflation is expected to reduce inflationary pressures and ease Pakistan's external financing burden. However, trade policy uncertainties and supply chain reconfigurations present both risks and opportunities for Pakistan to capture new trade activities and investment inflow.
For Sindh Modaraba, the improving macroeconomic environment offers a promising outlook. As borrowing costs decline, demand for credit is increasing, allowing the Modaraba to strategically expand its financing portfolio in growing sectors such as automobiles, manufacturing, and agriculture. Enhanced remittance flows and investor confidence are expected to improve borrower creditworthiness, while capital market growth opens avenues for new investments.
The management of Sindh Modaraba emphasizes the importance of diversifying the portfolio within low-risk sectors and maintaining timely recovery from customers to sustain long-term growth and financial stability. Continued monitoring of global and domestic risks will be crucial in achieving these goals.