FFC’s big quarter 2QCY25: strong profits, but a few surprises too

Fauji Fertilizer Company (FFC) has just shared its financial results for the second quarter of 2025, and the numbers are impressive!

Let’s break it down in simple words:

Earnings jumped 62%!

FFC made a profit of Rs25.2 billion, which means Rs17.69 per share. That’s a 62% increase compared to the same quarter last year.

The main reason? FFC earned more than expected from its investments in power companies, and that extra income gave a big boost to overall profits.

Sales up, but costs also higher

• Total sales hit Rs91.8 billion (up 61% YoY), mainly because FFC sold more DAP fertilizer, especially after merging with FFBL.
• But not everything was rosy: Urea sales went down by 6%, and costs jumped due to expensive raw materials like DAP and granular urea.

That’s why gross margins (how much profit is made on each product sold) actually fell to 33.7% from 54.5% last year.

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

Other key highlights

• Distribution costs rose by 57%, mainly due to increased DAP sales.
• Other income (like dividends from power subsidiaries) soared 3.8x to Rs20.7 billion!
• Finance costs (interest on debt) also rose by 24% to Rs1.7 billion, a side effect of taking on more debt after the merger.

Dividend announcement

FFC will give Rs12 per share as a cash dividend this quarter, a 34% increase from last year.

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.

Outlook: still a ‘Buy’

Analysts at AKD Securities remain positive on FFC with a target price of Rs597/share by June 2026. They like the company for a few reasons:

• It benefits from low gas prices for its plants.
• It gets steady income from power investments.
• It’s growing its food business and cutting costs.

Final thoughts

Yes, margins are tighter, and debt is higher post-merger, but FFC’s strong earnings and solid dividend show it’s still in good shape. Investors are watching closely as the company finds balance between growth and cost control.

Simple takeaway? FFC had a big win this quarter, and even though there are a few red flags, the long-term story looks promising.

⚠️ 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 →