Engro Holdings Reports Soaring Earnings, Beats Industry Expectations

Karachi: Engro Holdings (ENGROH) announced a significant increase in its second quarter of 2025 financial results, with earnings per share (EPS) reaching Rs28.0, a 17.4-fold increase year-over-year. The profit attributable to equity owners was Rs33.7 billion, surpassing industry predictions. After adjusting for one-off thermal asset transactions, recurring EPS stood at Rs6.0.

For the first half of fiscal year 2025, Engro’s earnings amounted to Rs35.6 billion, reflecting a 9.1-fold year-over-year increase. Excluding adjustments, earnings totaled Rs9.0 billion with an EPS of Rs7.5. The company had been in the process of divesting its thermal energy business, but the share purchase agreement was terminated in April. Consequently, Engro reversed a prior accounting adjustment of PKR 53.7 billion and resumed recording the business as ongoing operations in June.

The results included a 28-day period of operations from Deodar, following the completion of the transaction on June 3, 2025. Among subsidiaries, Engro Fertilizers Limited (EFERT) saw its earnings rise 3.3 times to Rs5.6 billion, driven by increased sales, which climbed 28% year-over-year to Rs50.4 billion.

Conversely, Engro Polymer (EPCL) reported a loss of Rs2.4 billion in the second quarter, compared to a Rs0.7 billion loss in the same period last year, due to reduced gross margins. Administrative expenses surged by 139% year-over-year to Rs9.7 billion, largely attributed to costs associated with the Deodar acquisition.

The effective tax rate fell to 12% from 36% the previous year, attributed to tax-free profits from thermal assets. Engro Holdings did not declare any cash dividend, opting instead to finance its tower business acquisition. Analysts maintain a “Buy” recommendation on Engro Holdings, with the stock trading at a price-to-earnings ratio of 7.1x for 2025 and 5.6x for 2026.