Karachi: Sindh Modaraba Limited has shown resilience in a turbulent economic environment for the fiscal year ending June 30, 2025, by achieving significant growth in its Islamic financing portfolio. This development comes amid macroeconomic challenges and a 50% reduction in the policy rate by the State Bank of Pakistan (SBP), highlighting the adaptability of the Modaraba’s business strategies.
According to the Chairman’s Review Report presented to certificate holders, Sindh Modaraba maintained a sound financial standing, despite the economic hurdles. The Board of Directors, in compliance with regulatory requirements including the Listed Companies (Code of Corporate Governance) Regulations, 2019, has established a governance framework that supports strategic objectives. The Board’s regular meetings and strategic guidance were instrumental in navigating the challenges posed by the reduced policy rate.
The report emphasized that, even with a 35.41% rise in operating expenses due to strengthening its marketing functions, the Modaraba achieved a remarkable 124.18% growth in its Islamic financing portfolio. This substantial increase is classified as a very large or significant move, demonstrating robust demand for Shariah-compliant financing products.
Despite a decrease in revenues from PKR 407.34 million in 2024 to PKR 341.80 million in 2025, Sindh Modaraba managed to earn a net profit after tax of PKR 180.11 million, down from PKR 201.33 million the previous year. Operating expenses increased to PKR 87.44 million from PKR 64.57 million, which impacted the profit margins.
According to information available from the Pakistan Stock Exchange (PSX), the Modaraba’s total disbursement increased fourfold over the preceding year to PKR 1.518 billion. This figure reflects strong customer confidence and demand for its financing products.
The broader economic landscape remains challenging, with Pakistan’s real GDP growth measured at approximately 2.7% for FY 2024-25, slightly outperforming IMF forecasts. Inflation cooled significantly to an annual average of 4.6% in FY 2024-25, down from a peak above 30% in 2023. However, the fiscal deficit and exchange rate stability continue to require careful management.
In the non-bank financial sector, of which Modarabas are a part, there was a mixed performance with a notable asset growth of 80% in CY24, driven by the asset management segment. The Modaraba sector’s asset base grew modestly by 1.2% in CY24, contrasting its 14.1% contraction in CY23.
Sindh Modaraba received a stable credit rating outlook of A+ and A-1 for long-term and short-term ratings, respectively, from VIS Credit Rating Company. The Board of Directors also approved a cash dividend of 13.50%, equivalent to PKR 1.35 per certificate for the year ended June 30, 2025.
Looking forward, Sindh Modaraba’s outlook is cautiously optimistic, contingent upon sustained policy reforms and a stable geopolitical environment. The Board and management remain committed to advancing the Modaraba’s objectives, embedding ESG principles, and contributing positively to the broader community and environment. With continued reforms and stakeholder support, Sindh Modaraba aims to achieve sustainable and inclusive economic growth.