FIRST ASIA SECURITIES
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EquitiesFixed Income
DATA AS OF 13 JUL 2026 · EOD

FFC

Fauji Fertilizer Company
FERTILIZER

LAST · PKR

556.15
−5.75 ▼ −1.02%
P/E 9.3× · YIELD 6.6% · ROE 34.4%

52W RANGE

381.70652.00
65% OF RANGE · YTD −2.9%
01 / FFC — 1 YearAS OF 13 JUL 2026 · EOD
PERIOD 1Y · 250 SESSIONS▲
The Call
NEUTRAL+11%
620.00PKR · 12-MO
10.0× FY26E

Steady volumes; yield carries the return.

Risks to our view
02 /

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

A 34% ROE cash machine, fully valued

  1. 01

    Neutral, PKR 620 target: FFC is a high-quality compounder — 34% ROE, 6.6% yield — but at 9.3× the market already pays for the merged-scale story; total return, not a re-rate, is the case.

  2. 02

    Post-merger scale entrenches the urea franchise and the dealer network; pricing power and a high payout are intact.

  3. 03

    The cap is policy: feed/fuel gas pricing and the GIDC overhang sit between margin and shareholder.

  4. 04

    At ~10.0× our FY26E EPS the target is PKR 620 — the ~18% total return is the call, not multiple expansion.

Where we differ from the street
Street viewOur viewWe change our mind if
A 6.6% yield on a defensive name is a hard floor.Well-covered and a genuine support, but gas-pricing risk caps upside.A durable resolution of feed-gas pricing.
Integration is done; the easy gains are in the base.Largely captured; from here it is volume and pricing, not structural re-rating.A new growth leg — exports or non-urea.
Subsidy withdrawal dents off-take.Urea is inelastic and FFC holds share; steady, not a growth story.Two seasons of double-digit off-take decline.

— FIRST ASIA SECURITIES RESEARCH · NOT INVESTMENT ADVICE