Engro Fertilizers (KASE:EFERT) - Share price, News & Analysis

EFERT fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	2/6
Financial Health	5/6
Dividends	2/6

EFERT Stock Overview

Engro Fertilizers Limited manufactures, purchases, and markets fertilizers, seeds, and pesticides in Pakistan.

Rewards

Trading at 34.6% below our estimate of its fair value

Risk Analysis

Dividend of 18.59% is not well covered by earnings or forecast to be in the next 3 years

High level of non-cash earnings

Engro Fertilizers Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Engro Fertilizers
Historical stock prices
Current Share Price	PK₨88.78
52 Week High	PK₨102.40
52 Week Low	PK₨67.78
Beta	0.29
1 Month Change	-5.77%
3 Month Change	5.45%
1 Year Change	30.14%
3 Year Change	39.75%
5 Year Change	52.10%
Change since IPO	33.40%

Shareholder Returns

	EFERT	PK Chemicals	PK Market
7D	-3.3%	-0.6%	-1.8%
1Y	30.1%	4.8%	-12.1%

Return vs Industry: EFERT exceeded the PK Chemicals industry which returned 6.1% over the past year.

Return vs Market: EFERT exceeded the PK Market which returned -9.9% over the past year.

Price Volatility

Is EFERT's price volatile compared to industry and market?
EFERT volatility
EFERT Average Weekly Movement	3.3%
Chemicals Industry Average Movement	4.5%
Market Average Movement	5.8%
10% most volatile stocks in PK Market	8.8%
10% least volatile stocks in PK Market	3.6%

Stable Share Price: EFERT is less volatile than 75% of PK stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: EFERT's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2009	1,382	Nadir Qureshi	https://www.engrofertilizers.com

Engro Fertilizers Limited manufactures, purchases, and markets fertilizers, seeds, and pesticides in Pakistan. The company offers urea, phosphate, nitrogen, phosphorous, and potassium fertilizers under the engro urea, engro DAP, engro Zorawar, Engro Zarkhez Plus, Engro Zarkhez Khaas, engro zingro, engro zabardast urea, engro NP plus, engro MOP, engro SOP, engro ammonium sulphate, engro zoron, engro potash power, and engro phos power. It also provides rice and wheat seeds under the Bharosa brand; insecticides under the veyong jinteng and sega pest clear names; fungicides under the azidox and pivot names; herbicides under the truce xtra and fushu names; and micro nutrients.

Engro Fertilizers Fundamentals Summary

How do Engro Fertilizers's earnings and revenue compare to its market cap?
EFERT fundamental statistics
Market Cap	PK₨118.55b
Earnings (TTM)	PK₨20.86b
Revenue (TTM)	PK₨139.73b

5.7x

P/E Ratio

0.8x

P/S Ratio

Is EFERT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
EFERT income statement (TTM)
Revenue	PK₨139.73b
Cost of Revenue	PK₨96.37b
Gross Profit	PK₨43.37b
Other Expenses	PK₨22.50b
Earnings	PK₨20.86b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	15.62
Gross Margin	31.04%
Net Profit Margin	14.93%
Debt/Equity Ratio	41.6%

How did EFERT perform over the long term?

See historical performance and comparison

Dividends

18.6%

Current Dividend Yield

115%

Payout Ratio

Valuation

Is Engro Fertilizers undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

34.6%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: EFERT (PKR88.78) is trading below our estimate of fair value (PKR135.73)

Significantly Below Fair Value: EFERT is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: EFERT's PE Ratio (5.7x) is in line with the PK Chemicals industry average.

PE vs Market: EFERT's PE Ratio (5.7x) is in line with the PK market.

Price to Earnings Growth Ratio

PEG Ratio: EFERT is poor value based on its PEG Ratio (3x)

Price to Book Ratio

PB vs Industry: EFERT is overvalued based on its PB Ratio (2.6x) compared to the PK Chemicals industry average (1.2x).

Future Growth

How is Engro Fertilizers forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

1.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: EFERT's forecast earnings growth (1.9% per year) is below the savings rate (10.2%).

Earnings vs Market: EFERT's earnings (1.9% per year) are forecast to grow slower than the PK market (4.4% per year).

High Growth Earnings: EFERT's earnings are forecast to grow, but not significantly.

Revenue vs Market: EFERT's revenue (2.6% per year) is forecast to grow slower than the PK market (4.1% per year).

High Growth Revenue: EFERT's revenue (2.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: EFERT's Return on Equity is forecast to be high in 3 years time (36.3%)

Past Performance

How has Engro Fertilizers performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: EFERT has a high level of non-cash earnings.

Growing Profit Margin: EFERT's current net profit margins (14.9%) are lower than last year (18.7%).

Past Earnings Growth Analysis

Earnings Trend: EFERT's earnings have grown by 14.6% per year over the past 5 years.

Accelerating Growth: EFERT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: EFERT had negative earnings growth (-10.5%) over the past year, making it difficult to compare to the Chemicals industry average (44.1%).

Return on Equity

High ROE: EFERT's Return on Equity (45.4%) is considered outstanding.

Financial Health

How is Engro Fertilizers's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: EFERT's short term assets (PKR53.0B) do not cover its short term liabilities (PKR55.8B).

Long Term Liabilities: EFERT's short term assets (PKR53.0B) exceed its long term liabilities (PKR31.5B).

Debt to Equity History and Analysis

Debt Level: EFERT's net debt to equity ratio (6.6%) is considered satisfactory.

Reducing Debt: EFERT's debt to equity ratio has reduced from 83.8% to 41.6% over the past 5 years.

Debt Coverage: EFERT's debt is well covered by operating cash flow (124.9%).

Interest Coverage: EFERT's interest payments on its debt are well covered by EBIT (565.2x coverage).

Balance Sheet

Dividend

What is Engro Fertilizers's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

18.58%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: EFERT's dividend (18.59%) is higher than the bottom 25% of dividend payers in the PK market (3.66%).

High Dividend: EFERT's dividend (18.59%) is in the top 25% of dividend payers in the PK market (10.86%)

Stability and Growth of Payments

Stable Dividend: EFERT has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: EFERT's dividend payments have increased, but the company has only paid a dividend for 7 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (115.2%), EFERT's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (201.6%), EFERT's dividend payments are not well covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Materials industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

3.6yrs

Average management tenure

CEO

Nadir Qureshi

3.42yrs

Tenure

Mr. Nadir Salar Qureshi has been Chief Executive Officer of Engro Fertilizers at Engro Corporation Limited since December 2018. He had been Chief Strategy Officer at Engro Corporation Limited since March 2...

Leadership Team

Experienced Management: EFERT's management team is considered experienced (3.6 years average tenure).

Board Members

Experienced Board: EFERT's board of directors are considered experienced (3.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/16 00:00
End of Day Share Price	2022/05/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31