Waves Corporation and its key subsidiary Waves Home Appliances say the worst of the down-cycle is behind the sector and are preparing a full re-entry into air conditioners (ACs) – a category they exited during the currency crisis over the past three years – betting that a recovering consumer and a cleaner balance-sheet can restore growth in the core white-goods franchise.
On a consolidated basis, Waves Corporation reported a robust rebound for the first nine months of calendar year 2025, with net sales up by the mid-teens and profits roughly doubling from the prior year. Specifically, 9MCY25 consolidated revenue rose about 15% year-on-year to Rs3.54 billion, while profit after tax increased about 130% to Rs648 million. Gross margin was near 30% for 9MCY25, EBITDA up about 12%, and profit before tax up about 91% year-on-year, reflecting both operating improvement and a large contribution from “other income.”
At the subsidiary level, Waves Home Appliances’ full-year CY24 was still a rebuilding year – sales fell about 24%. But the turning point is visible in CY25’s run-rate: in 3QCY25 alone, revenue rose about 21% year-on-year and profit after tax swung to Rs106 million, lifting the quarterly net margin to 13%. The operating line improved as well, with operating profit up about 17% year-on-year in the quarter. Margin expansion alongside a rising top line signals that pricing, mix and cost discipline are beginning to offset the drag from elevated borrowing costs.
Two non-operational levers aided reported earnings across the group in the period: gradual recognition of unrealised gains on real-estate assets (the holding company’s Lahore land and the subsidiary’s Kasur land), and gains recognised from approved bank loan restructurings that deferred accumulated and recurring financial charges. Management emphasises that these revaluation-driven items are being booked conservatively and phased to avoid a single “one-off” spike.
Today’s Waves Corporation is a holding company with three main businesses:
- Waves Home Appliances Ltd – the manufacturing arm for refrigerators, deep freezers and planned CKD-based categories such as ACs, washing machines and microwaves. Waves Corporation now owns 50% of WAVESAPP, reflecting a partial divestiture of the manufacturing business in recent years.
- Waves Market Place – the group’s retail and instalment-sales platform. It operates about 100 branded shops and sells both WAVES and other leading consumer-appliance brands, with a recovery ratio above 95% even through the tight credit conditions of the past few years – an outcome management attributes to a committed customer base and disciplined credit control.
- Waves Builders & Developers – the real-estate arm that sits on the legacy factory land in Lahore near Thokar Niaz Baig on Multan Road – an entry point for traffic and wholesale flows across Punjab. The land remains on the holding company’s balance-sheet and is the foundation for a mixed-use plan whose options range from a wholesale market to education and healthcare uses, small-plot commercial development and, critically, affordable housing within the urban core.
The corporate realignment – especially the sale of a stake in the appliances manufacturing arm – has left Waves Corporation more like a portfolio parent: half-owner of the industrial engine, full owner of a retail/consumer-finance channel that can pull through factory volume, and steward of a large urban land tract. That land has assumed greater importance not only as collateral and source of latent value for the balance-sheet, but also as a strategic hedge against the cyclicality of durables demand. As of the latest briefing, the Lahore property’s book value is about Rs3.8 billion, which management calls conservative relative to DC rates – let alone market prices – given that the book value was recorded at 25–30% below DC rates.
(Context: tax collection on land is done at the district level, and based on the declared value of the land. Most people severely under declare to the government. The office in charge of collecting such taxes is the Deputy Commissioner (DC) of a district and hence the lower “official” values of land are called DC rates.)
Management says there has been real third-party interest in an outright purchase, though final offers have paused as housing demand cooled nationwide. Internally, while Waves has a plan to develop the site, the current macro backdrop has nudged the company to be more inclined toward a simple sale if that route maximises near-term value. Either way, management expects to continue booking unrealised gains gradually in “other income.”
Deep freezers remain the franchise cornerstone. Over the past five years, Waves’ overall market share in deep freezers has averaged around 40%, and at one point the company captured 70–80% of the corporate (institutional) segment – selling to beverage and food players that need robust cold-chain assets. The corporate-client list includes household names such as Coca-Cola and poultry-to-processed foods giant K&N’s. The institutional franchise provides not only volume stability but also a platform for specification-led upgrades as energy-efficiency standards rise.
Refrigerators are the main battleground. Management acknowledges the brand’s single-digit share in refrigerators today, despite offering a full-width range across five sizes that “covers most market needs.” The intention is to grow share through a combination of improved aesthetics, higher-capacity models, and tighter integration with the retail instalment channel so that buyers can trade up without a large cash outlay.
During the monetary squeeze and import compression of the last two years, Waves discontinued several categories that rely on imported components and Completely Knocked Down (CKD) assembly – including ACs. With conditions easing, ACs are slated to restart under a CKD model, with supply expected “in the next couple of months,” positioning the brand to participate in what remains one of the largest, fastest-growing pockets in Pakistan’s appliance market. Management frames ACs as a key growth lever for CY26-onward: even a 5% share of an AC market sized at 1.2–1.5 million units could materially lift group sales.
Other lines include washing machines, microwaves and geysers, with plans to revive water dispensers as supply chains normalise. The company also exports refrigerators and freezers to Afghanistan, though shipments have been temporarily paused due to the “war-like” situation in that market – an external headwind the company expects to reassess periodically.
The Pakistan appliances market is sizeable – about Rs750 billion – and structurally tilted toward refrigeration and cooling. Refrigerators account for roughly Rs230 billion, and ACs near Rs190 billion by value. In other words, nearly three fifths of the market’s value sits in categories where Waves either has its strongest legacy (deep freezers/refrigeration) or is restoring presence (ACs). That creates a clear strategic imperative: defend and grow the refrigeration franchise while rapidly rebuilding credibility in ACs.
As incomes recover from the past tightening cycle and banks re-open to consumer credit partnerships, instalment plans – whether via retailers like Waves Market Place or through bank tie-ups – can expand penetration beyond cash buyers. Waves’ retail arm already serves about 400,000 customers and is exploring a consumer-financing partnership, which could be a meaningful in-house demand engine for higher-priced lines.
Even with flattish volumes, average selling prices rise as households leapfrog to bigger refrigerators and higher-efficiency ACs. The group’s notes explicitly highlight that top-line value is growing faster than units, a dynamic that rewards brands with credible after-sales networks and financing hooks.
Against that backdrop, the company’s earlier exit from ACs – forced by import compression and high rates – carried an obvious growth cost. Re-entry matters because ACs are where brand discovery, seasonal promotions and consumer-finance economics often interlock most strongly. With CKD-based relaunch plans advancing and supply expected to resume imminently, Waves is positioning itself to compete in that profit pool again.
Waves Market Place is not merely a distribution channel; it is a credit engine. Operating roughly 100 shops nationwide and selling both the group’s and third-party brands on instalments, the arm maintained greater than 95% recovery through the downturn – an outcome that speaks to underwriting discipline and useful first-party data. As the AC relaunch proceeds, that same platform can target pre-qualified customers for upgrades, smoothing demand through monsoon-to-summer seasonality.
Real estate as a value unlock – and a transit story. The holding company’s Lahore factory land – near Thokar Niaz Baig on Multan Road – has morphed from an industrial footprint into a high-optionality urban asset as the city expanded outward. Crucially, the site’s proximity to the Orange Line of the Lahore Metro underpins much of its latent value. Management’s concept plan envisions a mixed-use scheme: wholesale-market space to serve Punjab’s distribution trade, community-scale education and healthcare, small-plot commercial opportunities, and affordable multi-storey housing – something the company argues is scarce within the city core. If executed, the project would be a textbook case of transit-led development, with mass-transit adjacency converting former factory land into residential and community value.
From a capital-allocation standpoint, Waves stresses prudence. The book value of the Lahore property (about Rs3.8 billion) is, by management’s estimate, marked below even DC rates, and well below what market participants would ascribe in a liquid environment. That conservative accounting gives the group room to recognise revaluation gains gradually in other income, smoothing earnings while it weighs an outright sale versus phased development. Interest from large developers has been real, management says, but final bids are on ice until housing absorption improves.
A similar approach is visible at the subsidiary level, where WAVESAPP has partially booked the unrealised gain on Kasur land – estimated by management at nearly four times its book value – again doing so gradually rather than in a single lump-sum to avoid distorting comparability.
Risks remain. A sustained spike in interest rates or renewed import compression could again squeeze CKD supply chains and instalment affordability. Competitive intensity in ACs and refrigerators is high, with global and local players fighting on price, features and after-sales reach. And while “other income” has been a legitimate, disclosed earnings bridge – stemming from conservative revaluation and restructuring accounting – it is not a substitute for cash profits from operations. Still, the 3QCY25 subsidiary turnaround and the 9MCY25 consolidated step-up suggest that operational recovery is taking the wheel as the re-entry into ACs approaches.
Waves’ story in 2025 is not a simple cost-cutting rebound. It is a portfolio reset: a cleaner, more transparent corporate structure; a manufacturing arm gearing up for a return to high-growth categories; a retail-credit network that can manufacture demand; and a transit-adjacent urban asset whose patient monetisation can underwrite growth. The headline act is the AC relaunch – a necessary move if Waves is to participate in the biggest profit pool in Pakistani white goods. But the supporting cast matters: deep-freezer leadership gives credibility; refrigerators define everyday relevance; retail instalments widen access; and the Lahore land bank offers a capital cushion in a cyclical business.
If management can deliver even a modest AC share and a few points of refrigerator share gain – while keeping recoveries high and debt controlled – the financial arc already visible in 3QCY25 could extend. The result would be a group better aligned to where the consumer is actually spending and to where the city is actually growing – on showroom floors and along the Orange Line.
