Supernet Ltd, the first technology company to list on the Pakistan Stock Exchange’s Growth Enterprise Market (GEM) board, has released headline numbers that show just how quickly a small-cap ICT firm can swell in size when it ventures beyond its comfort zone – and – how costly the learning curve can be. Consolidated revenue in the year to June 2024 leapt 117% to roughly Rs8.5 billion, propelled by a flurry of low-margin infrastructure contracts that management says are “foundational” for becoming a one-stop digital-solutions provider. Yet gross profit fell sharply: the margin slid to 16%, down from 29% the previous year and well below the company’s three-year average of 30%.
The market response has been nuanced rather than euphoric. After touching a 52-week high of Rs46.90 earlier this year, the share closed last Friday at Rs34.77 on modest volume, trimming the 2025 year-to-date gain to 92% (dps.psx.com.pk). Analysts put the stock’s trailing P/E at 27 – not eye-watering for a growth name, but sufficiently rich to demand evidence that management can rebuild profitability while still chasing scale.
Supernet’s audited accounts lodged with the PSX show unconsolidated sales of Rs7.37 billion for fiscal year 2024, up from Rs3.43 billion a year earlier – already a doubling, and one achieved before the group makes the customary post-consolidation adjustments that lift the top line toward the disclosed Rs8.5 billion figure. Company officials say a clutch of turnkey data-centre builds, fibre roll-outs for provincial government clients and power-conditioning work for telcos accounted for three-quarters of incremental revenue.
But those same projects clipped margins by forcing Supernet to book hardware pass-through and subcontractor costs it does not face in its higher-margin satellite and microwave-connectivity franchise. The prize is the annuity stream once those facilities need upgrades, managed services and cybersecurity layers. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
