Fertilizer sales recover as kharif season kicks in, what it means for investors?

Fertilizer companies are seeing a bounce back in sales as the Kharif season gains momentum. After a slow start to the year, farmers are back in the fields, and the demand for nutrients like urea, DAP, and CAN is picking up. Let’s break it down.

Sales improve after a slow start

Fertilizer companies like FFC, EFERT, and FATIMA have reported better sales in June 2025:

• Urea sales rose 21% YoY in June
• CAN sales rose 28% YoY
• DAP and NP sales fell 7% and 13% YoY, respectively

The improvement is mostly due to:

📢 Announcement: We're on WhatsApp – Join Us There! 

• Discounts offered by companies
• Government-backed interest-free loans to farmers
• Lower stock levels at the retail level

Kharif season demand up

As Kharif planting season continues, urea offtake (sales) is expected to grow 15% YoY, reaching 3.1 million tons. Full-year urea sales, however, may still be down by 6% due to heavy advance buying at the end of 2024.

Company performance highlights

FFC (Fauji Fertilizer Company)

• Urea sales in June: 269k tons, up 4% YoY
• DAP sales dropped by 11%
• Market share dropped slightly due to high base last year
• Target Price (Jun’26): PKR 597 | Dividend Yield: 9.2%

EFERT (Engro Fertilizers)

• Urea sales: 208k tons, up 34% YoY
• Recovered market share from 32% to 36%
• DAP sales fell 62% due to increased local supply
• Target Price: PKR 252 | Dividend Yield: 10.3%

FATIMA Fertilizer

• Urea sales: 81k tons, up 93% YoY
• DAP sales tripled YoY 🚀
• Gained market share from 9% to 14%
• Strong growth expected from new Sheikhupura plant
• Target Price: PKR 125 | Dividend Yield: 7.7%

Investment view

Analysts are optimistic:

• Earnings estimates for FATIMA revised up for both 2025 and 2026
• FFC and EFERT’s 2025 earnings revised slightly downward due to higher discounts
• Export permission for urea could ease local inventory pressure and support margins

Fertilizer stocks are looking attractive again as the Kharif season boosts demand. With strong dividends and improving sales, FFC, EFERT, and FATIMA are worth watching for long-term investors.

Don't miss:

• Which cars are driving the rally in auto stocks?
• 5 High ROE stocks according to Topline Securities
• Why TPLP could go higher.

Source: AKD Securities

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →