Barkat Frisian Agro Limited (BFAGRO) presents a compelling investment opportunity as Pakistan’s pioneering and sole producer of pasteurized egg products. The company stands at a turning point, driven by strategic capacity expansion and vertical integration initiatives that are poised to accelerate growth and enhance profitability.

BFAGRO is strategically positioned to capitalize on Pakistan’s underpenetrated processed egg market through its Faisalabad expansion project, which will increase total capacity by 71% to 29,000 tons. The recently approved PKR 690 million backward integration into poultry farming addresses critical supply chain vulnerabilities while creating substantial margin enhancement opportunities. The company’s export momentum continues to accelerate, with international sales growth supported by its established presence across Middle Eastern markets.

We recommend a ‘BUY’ rating on Barkat Frisian Agro Limited (BFAGRO) with a target price of PKR 60/share, representing 34% upside from the current price of PKR 44.77/share.

Risks

Major chunks of revenue come from a few clients, creating significant vulnerability to client loss or pricing pressure. The ~60-day cash conversion cycle creates a persistent liquidity strain due to cash payments to farmers versus credit sales to corporate clients. Backward integration introduces poultry health and disease management challenges that could disrupt production and impact costs.

Courtesy – AHCML Research