Karachi: The Board of Directors of Sindh Modaraba Management Limited has presented the unaudited financial results for Sindh Modaraba for the half-year ended December 31, 2025. The financial performance indicates a profit before tax of Rs. 100.72 million for the period, reflecting the institution’s resilience amidst evolving economic conditions and shifting monetary policies.
The revenue from financing operations rose by Rs. 44.41 million compared to the same period last year. A notable achievement during this period was the reduction in non-performing loans (NPLs), resulting in a reversal of provision amounting to Rs. 13.47 million. The Diminishing Musharaka financing portfolio also saw an expansion to Rs. 1,597.36 million by the end of December 2025, up from Rs. 939.94 million in December 2024. Fresh financing facilities disbursed totaled Rs. 554.93 million, with an impressive recovery rate of approximately 100%.
In terms of future outlook, VIS Credit Rating Company Limited has upgraded Sindh Modaraba’s long-term rating from A+ to AA- and short-term rating from A1 to A1+. This enhancement underscores the Modaraba’s high credit quality and robust liquidity factors. An equity injection of Rs. 1 billion from the Government of Sindh further strengthens the institution’s financial base, earmarked for a Riba-free subordinated fund.
According to information available from the Pakistan Stock Exchange (PSX), Sindh Modaraba is poised to leverage growing demand for Shariah-compliant, Riba-free financing solutions, particularly in the SME, commercial, and priority agriculture sectors. The current monetary environment, shaped by the State Bank of Pakistan’s policy rate of 10.50% and moderating inflationary trends, is anticipated to bolster demand for financing and enhance repayment capabilities, thereby improving portfolio quality.
The management plans to pursue cautious growth in its Islamic financing portfolio, focusing on low-risk, well-secured exposures, and clients with stable cash flows. The emphasis remains on timely recoveries, active portfolio monitoring, and disciplined credit appraisal to sustain return yields and manage credit risk.
The condensed interim financial information for the period outlines a series of financial adjustments, with a net cash outflow of Rs. 104.18 million from operating activities. This is attributed to increased working capital requirements and strategic investments. Total assets stood at Rs. 2.06 billion, with a consolidated equity of Rs. 2.01 billion, highlighting a stable financial position. The management remains committed to sound corporate governance and strict adherence to Shariah principles to ensure sustainable growth and stability amidst ongoing economic and regulatory challenges.