FIRST ASIA SECURITIES
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DATA AS OF 13 JUL 2026 · EOD

ENGRO

Engro Holdings
CONGLOMERATE

LAST · PKR

318.50
+1.75 ▲ +0.55%
P/E 6.0× · YIELD 0.0% · ROE 44.4%

52W RANGE

160.75302.50
111% OF RANGE · YTD +16.0%
01 / ENGRO — 1 YearAS OF 13 JUL 2026 · EOD
PERIOD 1Y · 250 SESSIONS▲
The Call
BUY+16%
370.00PKR · 12-MO
6.4× FY26E

Cyclical recovery; partial re-rate.

Risks to our view
02 /

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

Cheap, high-return — but you wait without a coupon

  1. 01

    Buy, PKR 370 target: at 6.0× with a 44% ROE, Engro Holdings is cheap for the quality of its parts — fertilizer, petrochemicals, energy and telecom infrastructure.

  2. 02

    The cyclical swing is petrochemicals: a polymer-margin recovery and the telecom-tower build-out drive the FY26 earnings.

  3. 03

    The catch is income — the holdco currently pays no dividend, so the return is entirely re-rating and growth.

  4. 04

    At ~6.4× our FY26E EPS the target is PKR 370; the discount to the parts is too wide for a 44% ROE.

Where we differ from the street
Street viewOur viewWe change our mind if
No dividend and complexity keep it cheap forever.A 44% ROE at 6× is too cheap; a value-unlock or a payout initiation is the catalyst.Capital mis-allocation into sub-scale ventures.
Polymer margins are cyclical and roll over.Domestic demand and import substitution cushion the trough; a real, if cyclical, recovery.A sustained collapse in regional PVC-ethylene spreads.
Income investors have no reason to hold.This is a total-return, re-rating story, not an income one; the cheapness is the case.Earnings growth stalling with no payout to compensate.

— FIRST ASIA SECURITIES RESEARCH · NOT INVESTMENT ADVICE