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DATA AS OF 13 JUL 2026 · EOD

EFERT

Engro Fertilizers
FERTILIZER

LAST · PKR

194.13
−2.47 ▼ −1.26%
P/E 11.6× · YIELD 7.5% · ROE 55.9%

52W RANGE

179.34247.64
22% OF RANGE · YTD −12.3%
01 / EFERT — 1 YearAS OF 13 JUL 2026 · EOD
PERIOD 1Y · 250 SESSIONS▲
The Call
NEUTRAL+11%
215.00PKR · 12-MO
17.9E EPS × 11.9×

Single-digit price upside; the 7.5% yield carries the return.

What kills the call
  • ALSO WATCH · FEED-GAS PRICING / SUBSIDY — OGRA NOTIFICATIONS
02 /

FAS DESK · FIRST ASIA SECURITIES RESEARCH · 23 JUN 2026 · EOD

A 56% ROE — but priced at twelve times

  1. 01

    Neutral, PKR 215 target: EFERT throws off a stunning 56% ROE and a 7.5% yield on a concessionary-gas edge — but at 11.6× the quality is in the price.

  2. 02

    The concessionary-gas advantage underpins margins and one of the market's most reliable payouts.

  3. 03

    The ceiling is policy — feed-gas pricing and subsidy decisions sit between margin and shareholder.

  4. 04

    At ~11.9× our FY26E EPS the target is PKR 215; single-digit price upside, with the yield carrying the total return.

Where the price goes in 12 monthsBEAR / BASE / BULL
155BEAR−20%215BASE+11%240BULL+24%TODAY 194.13
How we reach the PKR 215 price targetFROM GAS COST TO EARNINGS · BASE CASE
SCENARIO — SHARE OF THE GAS COST RECOVERED IN THE UREA PRICEBEAR 50%BASE 90%BULL 100%× 11.9 P/EGAS COST▲ +15%UREA PRICE / BAG4,743CASH MARGIN / BAG956EBITDA41.7 bnEARNINGS / SHARE17.9FARMER AFFORDABILITY▼ weak linkBAGS SOLD43.6 mn12-MO TARGETBEAR 155BASE 215BULL 240
Margin per bagPKR / 50KG
4,480UREA PRICE263RECOVERED−2,243GAS−1,545OTHER COST956CASH MARGIN

When the FY26 gas tariff lands, does the per-bag cash margin hold? The SRO delivers the cost shock at t+0. Urea pricing is deregulated but oligopolistic, and in every episode since 2019 producers have recovered most of a gas-cost increase through the urea price inside two quarters. The market prices the shock; the model prices the recovery, so the axis that matters is pass-through, not the tariff itself. Farmer affordability is the weak link, but urea is an essential, subsidised input: at our −0.15 elasticity, offtake gives back barely one percent. At 90% recovery the margin holds near PKR 956 a bag, EPS lands at 17.9, and an 11.9× base multiple carries the PKR 215 target. At half recovery the same arithmetic prints 155 — which is what the street is pricing.

SELECT A SCENARIO · HOVER ANY BOX FOR THE MATH

Where we differ from the street
Street viewOur viewWe change our mind if
Concessionary gas flatters returns; normalisation looms.The edge has persisted, but the 11.6× multiple already credits it — limited re-rating left.A move to uniform gas pricing across the sector.
A 7.5% yield is a solid floor.Well-covered and a genuine support, but not a catalyst.A payout cut on a gas-cost shock.
Subsidy normalisation hits off-take.Urea demand is inelastic; EFERT holds share.Sustained double-digit off-take decline.

— FIRST ASIA SECURITIES RESEARCH · NOT INVESTMENT ADVICE

EFERT · First Asia Securities