EFERT is evaluating the opportunity of setting up a fertilizer plant utilizing Thar coal

Topline Pakistan Research has highlighted the corporate briefing of Engro Fertilizers (EFERT), which offered insights into the company and the fertilizer industry. Recalled, Engro Fertilizers (EFERT) recently held its 3Q2025 Corporate Briefing Session, where management discussed financial performance and outlook.

Management stated that there has been some reclassification in Selling and Distribution expenses, which resulted in a higher YoY increase. While in 9M2025, Selling and Distribution expenses increased by 48% YoY due to higher inventory holding costs. Management said farmer economics have relatively improved for wheat, rice, and cotton. To note, wheat prices increased from Rs2,600-2,800/maund in Q2 to Rs3,500-Rs3,800/maund in 3Q2025.

EFERT has launched a Triple Super Phosphate (TSP) in Pakistan as an alternative to DAP, offering the same phosphoric content. On the pricing front, TSP is Rs 1,500–2,000 cheaper than DAP, providing farmers with a more affordable and efficient nutrient solution.

Management stated that the inventory situation is improving, and there have been decent off-takes recently, so they expect the industry’s inventory to remain over 1 million tons by December 2025. To note, the urea industry inventory stands at around 1.1 million tons in 3Q2025.

Currently, management is offering between Rs250 and Rs300/bag of urea, depending on the demand and supply in the market. While dealer margins for 3Q2025 stood at Rs225/bag.

Regarding the company’s DAP sales, management said it depends on the demand and supply factors. They had a lower inventory level of DAP in 3Q2025, which limited their sales. Market share of EFERT DAP fell to 12% during 9M2025 against 21% SPLY.

Management stated they took loans at the end of 3Q2025 to build up the DAP inventory, which reduced their finance costs compared to the debt level. Management noted that the company is evaluating the opportunity of setting up a fertilizer plant utilizing Thar coal.

Regarding gas prices, management stated that discussions are ongoing with the government. The industry is working closely with the Ministry on gas pricing, allocation, and related matters. Once finalized, management expects these developments to address most of the key concerns.

Regarding the pressure enhancement facility at Mari field, management said that scope-1 on phase one has been completed, while the completion date for scope-2 has changed from 3Q to 4Q. Management said no negative on gas pressure is expected.

EFERT is currently trading at a 2026F P/E of 11.2x and dividend yield of 8.5%.