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Pakistan Telecommunication Company Ltd (PTCL) is gearing up for a major rally. A new brokerage report from Chase Securities projects the telecom giant will hit a target price of Rs. 62 per share within the next 12 months. This represents a staggering 58% upside from its current trading level of approximately Rs. 40.
Analysts believe the company is transitioning from a period of earnings repair to a structural growth trajectory. Consequently, Chase Securities has highlighted PTCL as a potential “multi-bagger” over the next three to five years.
The bullish outlook hinges largely on the approved merger with Telenor Pakistan. PTCL completed this acquisition at a favourable sub-1× EV/Sales multiple. The term “sub-1× EV/Sales multiple” refers to a company valuation metric where the Enterprise Value (EV) is less than its annual sales revenue. This strategic move drastically reduces competitive rivalry in the local telecom sector.
Furthermore, the merger instantly scales PTCL’s operations. The company’s mobile market share will jump from 14% to a commanding 36%. This consolidation allows for better pricing discipline and significant operational synergies.
For instance, the combined entity will own approximately 24,000 towers. However, about 7,000 of these are overlapping sites that PTCL plans to retire. This rationalisation alone could deliver up to Rs. 21 billion in annualised savings.
PTCL Valuation & Profitability
Financially, the numbers look promising. Pro-forma figures suggest an annual profitability run-rate of Rs. 19–32 billion. This translates to roughly Rs. 3.7–6.3 per share. This is a marked improvement from legacy earnings, which were historically weighed down by episodic charges like the UBank clean-up.
Moreover, the stock appears significantly undervalued compared to global standards. PTCL’s current equity value sits at $707 million. On a post-merger basis, this equals roughly $10 per subscriber. In contrast, listed peers across Asia and Africa trade between $42 and $623 per subscriber.
Future Outlook & Risks
Chase Securities expects EBITDA margins to potentially rise to around 40% by late 2025. Additionally, mobile ARPU (Average Revenue Per User) is projected to grow from a low base of $1.1 to Rs. 525 by 2030, driven by data-heavy 4G and FTTH consumption.
However, execution remains critical. PTCL must successfully manage network rationalisation and IT integration. Risks such as regulatory conditions and emerging competition from LEO satellite broadband could still impact these projections. Nevertheless, the merger presents a significant re-rating opportunity for investors.
