Is Engro Fertilizer (EFERT) a good investment for 2025?

Engro Fertilizers (EFERT) having an effective market position as Pakistan’s second largest urea producer has strong focused products. It was confronted with many problems like gas price fluctuation to the extent of its inventory build-up but yet it has bagged a good amount of increase in profitability by opting for certain operational ways and changes in price structure for survival.

The emphasis on value added products, including zinc enhanced Z-Urea also enhances the competitive advantage and avoids confusion within the crowded marketplace. Innovation management as a strategy contributes to achieving competitive advantage where EFERT is exposed to homogeneity in gas price and rising industry rivalry.

EFERT’s production is split approximately 70:30 between its EnVen and Base plants, Using SNGPL and PP12 acquisition rates, feedstock gas for these plants is sourced at much higher costs(approximately 3 times as high as those on MARI network). This pricing structure has significantly been felt in EFERT’s gross margins and urea sales. However, analysts think that EFERT would be the biggest beneficiary of WACOG or price uniformity process as it seems this would eventually increase the fertilizer gas price parity and enhance the overall position and profitability of EFERT.

Lack of funds, gas price fluctuations, increased inventory levels, and gradual deterioration of farm liquidity were the problems that have an adverse effect on profitability; however, EFERT has maintained strong control over these problems to reduce their impact on profitability. Many companies have formulated their appropriate social strategies to recover declining profitability margins due to EFERT efforts that have focused on high-margin products and off-season sales incentives for inventory pressure release.

A higher DPR than that of the peer group suggests the efficacy of EFERT’s capital distribution, which adds greater value to the stock. EFERT has injected PKR 31.8bn to the national exchequer, which explains its role in the economy and its responsibilities to the broader economy.

What to expect from EFERT in 2025

According to out database of analyst EPS estimates, EFERT is expected to post an EPS of anywhere between Rs. 25 to Rs. 28 during CY2025. Its dividend expectations stand at at least Rs. 20+ for the year.

Here is how different research firms have set their target prices for Dec 2025:

Research Firm	Dec 25 target price (Rs.)
AKD Securities	242
IGI	243
Pearl Securities	249
JS Global	240
Intermarket Securities	220

Considering the stable demand of Fertilizer in the country, EFERT will continue to be a good and stable dividend investment for 2025.