Looking to grow inorganically

Back in early 2020, the share of the technology and communication index in the KSE-100 market capitalisation used to be under one per cent. Today, it accounts for almost 9.47pc. But the story of tech’s rise from being a nobody to becoming a major market mover wasn’t broad-based. Instead, it was crafted almost entirely by one company: Systems Ltd — the largest IT services firm in Pakistan. Founded in 1977 by Syed Babar Ali and Aezaz Husain, the company has been one of the pioneers of IT services in the country. But it took its sweet time to finally have a moment, which came right at the turn of the pandemic. Since 2020, Systems Ltd has witnessed great investor interest and at one point was trading in excess of 40x earnings. In 9MFY22, it posted a return of 40.1pc against KSE-100’s negative 3.71pc. And it’s quite understandable why. The company’s revenues of Rs20.1 billion during 9MCY22 are more than the previous two full years combined. All the while, its gross margin is north of 30pc. To top it off, it’s an export-driven entity that provides some hedge against Pakistan’s perennial macroeconomic woes.