ISLAMABAD: Pakistan’s IT exports have reached US$ 2.18 billion in the first seven months of fiscal year 2024-25, marking a 27% increase year-over-year (YoY) compared to the same period in the previous year, as reported by the State Bank of Pakistan (SBP).
According to Topline Securities, this achievement marks the 16th consecutive month of YoY growth for the IT export sector, beginning from October 2023.
In January 2025, IT exports totaled US$ 313 million, reflecting an 18% increase YoY, although a 10% drop compared to December 2024. However, January’s export figures surpassed the 12-month average of US$ 303 million.
Export proceeds per day in January were recorded at US$ 13.6 million, down from US$ 16.6 million in December 2024.
The year-over-year growth in IT exports can be attributed to several key factors:
– Expansion of IT companies’ client bases, especially within the Gulf Cooperation Council (GCC) region,
– Relaxation of the permissible retention limit by the State Bank of Pakistan, which increased from 35% to 50% in Exporters’ Specialized Foreign Currency Accounts,
– The introduction of equity investment abroad through these accounts,
– Stability in the Pakistani Rupee (PKR), encouraging IT exporters to bring back a higher portion of profits to Pakistan.
Pakistani IT companies have remained proactive in engaging with global clients. Recently, some of the leading companies participated in the Oslo Innovation Week and the Pak-US Tech Investment Conference.
A recent survey by the Pakistan Software Houses Association (P@SHA) found that 62% of IT companies are maintaining specialized foreign currency accounts.
A major shift this fiscal year is the SBP’s introduction of a new category for Equity Investment Abroad (EIA), specifically for export-oriented IT companies. Under this new policy, IT exporters can now invest up to 50% of their export proceeds from specialized foreign currency accounts in foreign entities. This development is expected to further bolster the confidence of IT exporters and encourage the repatriation of proceeds to Pakistan.
Net IT exports (exports minus imports) for January 2025 stood at US$ 281 million, showing a 17% increase YoY and 27% growth compared to the previous month. These numbers are also higher than the 12-month average of US$ 261 million.
Looking ahead, Topline Securities forecasts that the IT sector will maintain its growth trajectory, with projected growth of 10-15% for FY25, potentially reaching US$ 3.5 to 3.7 billion. The government’s ‘Uraan Pakistan’ national economic plan has set a target of US$ 10 billion in IT exports by FY29, signaling an ambitious annual growth rate of 28% until then.
Among the leading companies in the sector, Systems Limited (SYS) remains a top pick, with a forecasted price-to-earnings (PE) ratio of 15.0x for 2025 and 11.2x for 2026.
