Engro Holdings Ltd. (ENGROH) announced its 3QCY25 results, reporting consolidated earnings of PkR6.4bn (EPS: PkR5.35) compared to PkR5.7bn (EPS: PkR4.75) in SPLY, up 13%YoY. Earnings came in lower than expected due to higher-than-anticipated finance costs and taxation, according to a report of AKD Research.

·        Segment wise, energy portfolio i.e., Engro Energy Ltd. (EEL) has contributed PkR5.0bn (PkR4.1/sh) during 3QCY25, as per our estimates.

·        EFERT reported a decline of 32%YoY in earnings to PkR5.8bn in 3QCY25, mainly due to higher repair & maintenance expense related to base plant maintenance and lower DAP sales during the quarter.

·        EPCL losses contracted by 68%YoY PkR222mn in 3QCY25 from loss of PkR698mn in SPLY, mainly due to higher volumes, better pricing premium, and decline in finance cost due to easing interest rates.

·        Elengy terminal’s profitability is expected to be clocked in at PkR1.0bn. At the same time, FCEPL contributed PkR309mn to profitability vs. PkR306mn in SPLY.

·        Taxation during the quarter remained higher than expected, with ETR calculating to 47% from ~37% in SPLY, likely due to the imposition of minimum turnover tax in Connect.

·        For 9MCY25, earnings stood at PkR42.0bn (EPS: PkR34.9), up 4x YoY, largely due to the accounting impact of PkR27bn (PkR22/sh) stemming from the reclassification of the energy portfolio to continued operations.

·        We maintain our ‘Buy’ stance on ENGROH as profitability growth from the existing segments, coupled with the expansion into the telecom sector amid declining interest rate, and energy sector reforms are expected to enhance prospects. Our Dec’25 target price for the scrip is PkR301/sh.

https://research.akdsl.com/638974264883396197.pdf

AKD Research