AHL · Arif Habib Limited March 2026 Results Analysis

Verdict

Arif Habib Limited’s brokerage engine strengthened during the nine months ended March 31, 2026, but the improvement did not flow through to profit at the same rate. Operating revenue rose by about 31%, helped by much higher equity-brokerage revenue, while realized investment gains also increased. The counterweight was an adverse unrealized investment swing, lower other operating income and higher operating and finance costs. Profit after tax consequently rose only 4% on the standalone basis and 3% on the consolidated basis. Cash generation was strong and borrowings fell, although much of the cash improvement came from working-capital movements rather than earnings alone.

Company Name: Arif Habib Ltd

Ticker: AHL

Reporting period: Nine months and third quarter ended March 31, 2026

Reporting basis: Unaudited condensed interim unconsolidated and consolidated financial statements; amounts are in Pakistan rupees unless stated otherwise

AlphaGen readings

Alpha QoQ Score: Not available

TTM Performance Score: Not available

3Y Business Perf Score: 72.69

Sector Leadership Score: 69.2321

These four readings are AlphaGen model outputs, not company-reported financial figures. “Not available” means that a reliable value was not supplied for that reading; no substitute has been inferred. The readings are analytical signals, not accounting measures or investment advice.

What the filing covers

AHL’s board approved the results on April 27, 2026 and notified the exchange on April 28. The official PSX results announcement covers the nine months and third quarter ended March 31, 2026 and includes both standalone and group statements. The full quarterly report is unaudited; income-statement and cash-flow comparisons are against the corresponding period ended March 31, 2025, while balance-sheet comparisons are against the audited June 30, 2025 year-end.

The PSX company profile describes AHL as an investment-services company engaged in securities brokerage, investment banking, research, money-market and foreign-exchange brokerage, and financial advisory. The consolidated accounts include the wholly owned Rayaan Commodities (Private) Limited. AHL nevertheless reports a single operating segment because management says asset allocation is based on an integrated business strategy. That means the revenue-note detail is more informative than formal segment reporting when assessing the operating mix.

Financial comparison at a glance

Standalone nine-month operating revenue: PKR 1,502.7 million versus PKR 1,151.0 million; up 30.6%. Interpretation: brokerage-led growth materially expanded the recurring fee and commission base.

Standalone nine-month profit after tax: PKR 780.7 million versus PKR 750.4 million; up 4.0%. Interpretation: cost growth and the investment-marking swing absorbed most of the top-line improvement.

Standalone third-quarter profit after tax: PKR 259.8 million versus PKR 245.6 million; up 5.8%. Interpretation: quarterly earnings improved modestly even though realized disposal gains dropped sharply.

Consolidated nine-month profit after tax: PKR 775.6 million versus PKR 755.9 million; up 2.6%. Interpretation: the group result grew more slowly than the parent-only result.

All five comparisons come from the official interim financial statements. Percentages are calculated from the reported rupee amounts and are rounded to one decimal place. The distinction between standalone and consolidated figures is important: the two bases are close, but they are not interchangeable.

Brokerage was the main operating growth engine

Standalone operating revenue increased by PKR 351.7 million. The strongest component was equity-brokerage revenue, which rose 48.5% to PKR 1,094.7 million from PKR 737.0 million. Interbank-brokerage revenue slipped 2.5% to PKR 122.0 million, while advisory and consultancy fees fell 20.3% to PKR 161.0 million. Together, brokerage and investment-banking activities produced PKR 1,377.7 million, up 29.5%, according to note 13 and management’s review.

The economics behind this mix matter. Brokerage revenue generally benefits from higher traded value, client activity and market share, but can reverse when market turnover weakens. Advisory fees are usually project-based and can shift sharply depending on when transactions close. Management attributes the brokerage expansion to a larger retail client base, digital-platform enhancements and increased market share. Those are management explanations rather than independently established causes, but they are consistent with equity brokerage growing much faster than the other service lines.

Other operating-revenue components were mixed. Markup on margin financing fell 35.1% to PKR 44.5 million. Dividend income rose to PKR 57.7 million from PKR 11.0 million, and markup on corporate debt securities increased to PKR 22.8 million from PKR 7.2 million. The latter two helped the total, but dividend income is less directly tied to client activity than brokerage commissions and may vary with investee distributions.

Investment gains grew, but the marking swing diluted the headline

Realized gains on disposal of investments increased 16.0% to PKR 833.0 million from PKR 717.9 million. However, AHL recorded a PKR 73.0 million unrealized loss, compared with a PKR 25.7 million unrealized gain a year earlier. The swing was therefore adverse by roughly PKR 98.7 million. Net realized and unrealized investment gains were about PKR 760.0 million, only 2.2% above the prior period’s roughly PKR 743.6 million, despite the much larger realized component. The official profit-and-loss account makes this recurring-versus-mark-to-market distinction visible.

The third quarter illustrates the same issue more starkly. Operating revenue rose 55.4% to PKR 566.4 million, but realized disposal gains fell 76.5% to PKR 67.0 million. The unrealized loss narrowed to PKR 59.7 million from PKR 80.7 million. Combining operating revenue, realized gains and the unrealized movement gives about PKR 573.6 million for the quarter, only 0.9% above the comparable PKR 568.4 million. A large brokerage increase therefore offset, rather than compounded with, the weaker trading contribution.

Investment gains are genuine reported earnings, but their timing and repeatability differ from fee income. Realized gains depend on disposal decisions and market prices; unrealized gains or losses remeasure positions still held. A stronger quality-of-earnings reading would come from sustained brokerage and advisory revenue alongside investment gains, not from extrapolating either a favorable realization period or a temporary valuation movement.

Costs, finance and tax explain the modest profit conversion

Administrative and operating expenses increased 25.8% to PKR 1,276.5 million. Management says it invested in technology and human capital; the accounts establish the expense increase, while the stated purpose is management’s characterization. Other operating income declined 29.9% to PKR 212.9 million. Other charges fell sharply to PKR 3.3 million from PKR 46.6 million, providing a partial offset.

Finance cost rose 53.3% to PKR 109.6 million even though closing short-term borrowings later fell. Financing expense reflects average funding levels, rates and timing across the period, not merely the closing debt balance. Profit before levies and taxation was PKR 1,086.2 million, only 1.9% above the prior PKR 1,065.7 million. Levies increased to PKR 131.2 million, while taxation declined to PKR 174.3 million from PKR 205.1 million. The lower tax charge helped profit after tax grow faster than profit before levies and tax.

For the quarter alone, profit after tax increased 5.8% to PKR 259.8 million and EPS rose to PKR 3.98 from PKR 3.76. That is a sound directional improvement, but the mix argues against treating the 55% operating-revenue growth rate as an earnings run rate. Higher costs and a much smaller realized-gain contribution kept quarterly profit growth in the mid-single digits.

Consolidated result and the subsidiary effect

Consolidated operating revenue was PKR 1,537.7 million, up 30.0% from PKR 1,182.4 million. Group profit after tax rose 2.6% to PKR 775.6 million, and consolidated EPS increased to PKR 11.87 from PKR 11.57. The parent’s standalone profit was PKR 780.7 million, so the consolidated result was PKR 5.1 million lower. The accounts do not provide enough detail to assign every difference to one operating cause, but the comparison shows that the wholly owned subsidiary did not add to group net profit in this period.

The consolidated revenue note classifies PKR 1,129.6 million as equity-brokerage revenue, about PKR 35.0 million above the standalone amount. In the prior period, the subsidiary contribution appeared as commodity-brokerage revenue. This classification shift is another reason to compare the group and parent bases consistently and to focus on total brokerage economics rather than a single sub-label.

Balance sheet: more liquidity and lower borrowings, with larger settlement balances

Standalone total assets increased 12.0% from June 2025 to PKR 8.041 billion. Cash and bank balances rose 37.8% to PKR 5.137 billion, while short-term investments fell 11.1% to PKR 979.7 million. Trade debts increased 31.6% to PKR 572.6 million, and receivables against margin financing rose 59.0% to PKR 429.6 million. Receivables against securities trading, by contrast, dropped to PKR 173.5 million from PKR 683.1 million. These movements show both a larger liquidity pool and substantial shifts in client and settlement-related working capital.

Short-term borrowings declined 46.0% to PKR 465.5 million, but trade and other payables rose 29.2% to PKR 5.282 billion. Accrued markup also increased to PKR 62.6 million from PKR 7.5 million. Shareholders’ equity reached PKR 2.053 billion, up 6.6%, and management reports book value per share of PKR 31.42. Lower bank borrowing is constructive, but the large payable balance means settlement and client obligations remain central to the funding structure. Brokerage balance sheets should therefore be read through net liquidity, receivables and payables together rather than from cash alone.

Cash flow was strong, but working capital did much of the work

Standalone net cash generated from operating activities rose 52.3% to PKR 2.148 billion from PKR 1.410 billion. This comfortably exceeded reported profit after tax. The bridge, however, shows major working-capital support: trade and other payables added roughly PKR 1.194 billion, while the reduction in receivables against securities trading released about PKR 509.6 million. These are economically relevant cash inflows, but they may fluctuate with transaction settlement and client activity rather than recur in proportion to profit.

Investing activities generated PKR 336.1 million, partly from short-term investment movements and dividends. Financing activities used PKR 679.4 million, including PKR 649.6 million of dividends paid. A PKR 3.1 billion short-term sponsor loan was both received and repaid within the period, producing no net financing contribution. Cash and cash equivalents ended at PKR 4.671 billion, up from PKR 4.151 billion in the comparable cash-flow statement. The favorable conclusion is that liquidity and debt improved; the caution is that settlement balances explain a meaningful portion of the cash build.

Operational developments and corporate actions

Management reports that AHL executed the IPOs of Pak-Qatar Family Takaful and Pak-Qatar General Takaful, advised sukuk issuances for Gas & Oil Pakistan and Select Technologies, and completed CCL Holdings’ acquisition of Mitchell’s Fruit Farms. It also identified the Sitara Petroleum Service and Service Long March IPOs as work in progress at the report date. These disclosures support the breadth of the investment-banking pipeline, but future revenue depends on transaction completion and fee recognition.

The April 28 results notice declared no cash dividend, bonus shares, rights issue or other entitlement with these results. That announcement is separate from the PKR 649.6 million of dividends paid in the cash-flow statement, which relates to distributions approved previously. Readers should distinguish a current-period cash payment from a new distribution declared alongside the March result.

Risks and what to monitor next

First, track equity-brokerage revenue against market turnover and client growth; the 48.5% increase was the clearest operating driver. Second, separate fee and commission income from realized and unrealized investment gains to judge recurring earnings. Third, monitor the ratio of operating-expense growth to operating-revenue growth: the two were close this period, so continued investment must produce durable revenue or productivity. Fourth, follow finance cost alongside average—not just closing—borrowings and accrued markup.

Fifth, examine trade debts, margin-financing receivables and securities-settlement balances for credit, liquidity and cash-conversion signals. Sixth, compare parent and consolidated profit to see whether Rayaan Commodities begins contributing positively. Other relevant exposures include capital-market cyclicality, interest rates, securities-price volatility, counterparty and settlement risk, regulatory change and execution risk in the advisory pipeline. Management’s digital-brokerage and transaction pipeline can create growth, but the next filing must show how efficiently that growth converts into recurring profit and cash.

Bottom line

AHL’s March 2026 result was stronger at the operating-revenue level than at the bottom line. Equity brokerage expanded sharply, realized gains improved and liquidity ended higher, while borrowings fell. Yet the adverse unrealized swing, lower other operating income and higher costs limited standalone profit growth to 4%. The cleanest next-step test is whether brokerage momentum persists while operating costs stabilize, finance expense responds to lower funding, and cash remains strong without another large release from settlement-related working capital.

Sources

Arif Habib Limited — unaudited quarterly report for the nine months ended March 31, 2026

Arif Habib Limited — financial-results announcement dated April 28, 2026

Pakistan Stock Exchange — AHL company profile and filing index