Client Name

Alfalah Investments (AAML)

Faculty Advisor

Dr. Hilal Anwar Butt

SBS Thought Leadership Areas

Investment Decision Making

SBS Thought Leadership Area Justification

This ELP aligns strongly with the IBA-SBS Thought Leadership area of Investment Decision Making because the project is built around a real investment problem: evaluating whether PTCL’s acquisition of Telenor Pakistan creates sufficient value for investors to justify a positive stock recommendation. The project does not treat the acquisition only as a strategic corporate event; it translates the transaction into financial forecasts, pro forma statements, valuation outputs, sensitivity analysis and an investment recommendation. This is directly connected with the purpose of investment decision making, where analysts must convert business information into a disciplined view on risk, return and valuation.

The project contributes to investment analysis by building a detailed pro forma acquisition model that combines PTCL standalone forecasts with Telenor standalone forecasts and then adds acquisition-related adjustments such as transaction enterprise value, acquisition debt, purchase price allocation, goodwill, synergies, integration costs, 5G spectrum cost, tower rationalization and DCF valuation. This approach reflects how a research analyst would evaluate a listed company after a major merger or acquisition. Instead of relying only on narrative judgment, the project uses model-based analysis to estimate the impact on revenue, EBITDA, free cash flow, enterprise value, equity value and target price.

The project also supports market depth and efficiency because it organizes publicly available information into a transparent investment framework. PTCL is a listed company, while Telenor Pakistan’s standalone financial information is limited. Therefore, the model separates sourced figures, calculated figures and assumptions. This discipline is important for investment decision making because investors need to understand not only the final target price but also the reliability and sensitivity of the assumptions behind it. The report clearly identifies where numbers come from the model, where they are calculated from formulas, and where they are operational assumptions due to limited public disclosure.

The final recommendation of Hold / Accumulate also reflects the discipline required in investment research. The acquisition is strategically attractive because it improves PTCL/Ufone’s mobile scale, customer base, network position and future 5G readiness. However, the model also recognizes acquisition debt, integration costs, spectrum investment and capex pressure. The target price of PKR 59.31 per share compared with the market reference price of PKR 52.04 per share gives positive upside of around 14.0%, but this is below the model’s Buy threshold. Therefore, the project demonstrates that a good investment decision is not based only on whether a transaction sounds strategically positive; it must also consider valuation, execution risk, debt burden, cash-flow pressure and margin of safety.

Overall, the ELP fits the Investment Decision Making area because it applies financial modelling, valuation, scenario analysis and risk assessment to a live corporate transaction in Pakistan’s telecom sector. It produces an actionable investment view for a corporate client, Alfalah Asset Management Limited, and shows how academic finance tools such as DCF, WACC, terminal value, sensitivity analysis and equity valuation can be applied to a practical capital market decision.

Aligned SDGs

GOAL 9: Industry, Innovation and Infrastructure

Aligned SDGs Justification

This project aligns with SDG 9: Industry, Innovation and Infrastructure, which focuses on building resilient infrastructure, promoting sustainable industrial development and supporting innovation. The PTCL and Telenor Pakistan acquisition analysis is directly connected to this goal because the telecom sector is a core part of national digital infrastructure. Telecom networks support mobile connectivity, broadband access, enterprise communication, digital banking, e-commerce, education, remote work, public services and future 5G use cases.

The project evaluates how PTCL’s acquisition of Telenor Pakistan can strengthen telecom infrastructure in Pakistan by increasing mobile scale, improving network utilization, creating potential tower and spectrum efficiencies, and supporting future 5G readiness. In the combined model, the acquisition is not treated only as a financial transaction. It is also analyzed as an infrastructure and innovation platform, because PTCL/Ufone and Telenor together can create a larger fixed-mobile telecom operator with greater ability to invest in network modernization, 5G rollout, fiber backhaul, customer migration and digital service delivery.

The project also supports the innovation element of SDG 9 because the model specifically evaluates 5G spectrum cost, 5G site upgrades, new capacity sites, tower rationalization and network integration. These areas are important for future digital innovation because 5G and stronger telecom networks can improve data speed, reduce latency, support enterprise connectivity and enable more advanced digital services. The analysis recognizes that innovation is not free; it requires spectrum investment, capex discipline, integration planning and long-term financial sustainability.

Finally, the project promotes sustainable industrial decision-making by assessing whether the acquisition creates value after considering debt, integration cost, capex pressure, synergies, risks and valuation sensitivity. This is important because infrastructure expansion should be financially viable. A telecom merger may look attractive strategically, but it must also be tested through disciplined financial analysis. Therefore, the project contributes to SDG 9 by evaluating how a major telecom acquisition can support stronger digital infrastructure and innovation while remaining financially responsible and investment-worthy.

NDA

No

Abstract

The aim of this Experiential Learning Project is to assess the strategic and financial implications of PTCL's 100% acquisition of Telenor Pakistan and to find out whether an investment would generate enough value for the shareholder to recommend the investment to Alfalah Asset Management Limited. The analysis has been created using three integrated financial models, namely the PTCL standalone, the Telenor Pakistan standalone and a combined pro forma acquisition model. The structure provides for capture of the performance of each entity, as well as important transaction features like funding mix, goodwill, synergies, integration costs, spectrum investment and debt impact.

The PTCL standalone model includes historical data of FY2018-2024 and forecasts through FY2029, with revenue classified according to their retail segments. The Telenor model is built on industry drivers with Telenor's revenue estimated based on subscriber base and ARPU assumptions. Telenor is expected to generate revenue of PKR 114.8bn, and EBITDA of PKR 48.4bn for FY2024, which should reach PKR 71.3bn by FY2029.

The combined figure for the enterprise value of the transaction is PKR 108bn, which is funded by PKR 30bn internal funds and PKR 78bn of debt, resulting in a goodwill of PKR 26bn. One of the most significant changes is the revamp of spectrum fees to PKR 43.86bn, which is on the basis of PTA benchmarks. The enterprise value of the stock comes to PKR 381.1bn while the equity value is calculated at PKR 302.5bn, which gives a target price of PKR 59.31 per share compared with current market price of PKR 52.04, suggesting an upside of 14%.

The acquisition bolsters PTCL's mobile scale and 5G potential, while high debt, integration difficulties, and execution risks justify a current Hold recommendation.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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