AHL Research has initiated coverage on Attock Refinery Limited (ATRL) with a “BUY” rating and a target price of PKR 1,136 per share for June 2026, indicating a potential upside of 69%. We project a robust 36% CAGR in earnings over the next four years, supported by operational efficiencies and favorable market trends. Currently, ATRL trades at a low P/E ratio of 3.9 for FY26.

ATRL’s strong balance sheet, featuring PKR 77 billion in cash and a debt-free status, positions it well for upcoming upgrades under the new Refinery Policy, which is expected to enhance product quality and increase Motor Spirit (MS) output by 25%. An agreement with STP Studi Technologie for project consultancy marks a significant step towards these enhancements.

The refinery will benefit from a new policy allowing it to retain the full 10% deemed duty on High-Speed Diesel (HSD) and MS for six years, potentially generating substantial cash flows for upgrades. With expected deregulation, ATRL’s strategic northern location will allow it to capture cost savings and enhance its competitive advantage, projected to add PKR 62.8 to earnings per share annually.

Our DCF valuation confirms a target price of PKR 1,136 per share, recommending a “BUY” stance.

Courtesy – AHL Research**