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Karachi: Engro Fertilizers Ltd. (EFERT) has seen its performance dip below the KSE-100 index by 38% so far this year, as the company grapples with challenging market conditions. The company’s earnings have dropped by 21% from last year, totaling Rs14 billion, due to a slowdown in sales volumes, ongoing discounts, and increased financial charges.
Currently, EFERT’s Urea inventory stands at approximately 550,000 tons, a result of weakened local demand. This has necessitated offering discounts ranging from Rs250 to Rs325 per bag in the last quarter, discounts that remain in effect. During a recent corporate briefing session, management indicated that industry inventory levels are expected to hover around 1 million tons by the end of the year.
Despite these challenges, analysts maintain a Buy rating for EFERT, with a target price of Rs250 by June 2026. The stock is currently trading at a forward price-to-earnings ratio of 8.8x and offers a projected dividend yield of 11% for 2026. Experts anticipate that demand normalization in the coming quarters and easing working capital requirements will benefit the company, though any potential approval for exports could further improve its outlook.