{"id":11394,"date":"2025-08-27T13:27:48","date_gmt":"2025-08-27T08:27:48","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=11394"},"modified":"2025-08-27T13:27:50","modified_gmt":"2025-08-27T08:27:50","slug":"ffc-moving-closer-to-shariah-compliance","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/ffc-moving-closer-to-shariah-compliance\/","title":{"rendered":"FFC: Moving Closer to Shariah Compliance"},"content":{"rendered":"\n

Fauji Fertilizer Company (FFC<\/a>)<\/strong> is one of Pakistan\u2019s biggest fertilizer companies, well-known for its strong dividend payouts and dominance in the market. Recently, the company has been working hard to become Shariah-compliant<\/strong>, which means its operations and investments align with Islamic finance principles.<\/p>\n\n\n\n

What\u2019s the update?<\/h2>\n\n\n\n

According to its June 2025 financials, FFC is not fully compliant yet, but it has made big progress<\/strong>:<\/p>\n\n\n\n

    \n
  • Non-compliant investments<\/strong> (things not allowed under Shariah) have fallen to 32% of total assets<\/strong>, down from 40% in March 2025<\/strong>. This meets the benchmark of less than 33%.<\/li>\n\n\n\n
  • Non-compliant income<\/strong> (like interest-based earnings) is still a challenge. It stands at 7% of revenue<\/strong>, whereas the requirement is below 5%.<\/li>\n\n\n\n
  • Debt levels<\/strong> are very low, only 7% of total assets<\/strong>, much better than the 37% benchmark.<\/li>\n\n\n\n
  • Illiquid assets<\/strong> (like land, buildings) make up 38% of assets, well above the required 25%.<\/li>\n<\/ul>\n\n\n\n

    Simply put, FFC is ticking off most boxes, with only the income ratio left as the main hurdle.<\/p>\n\n\n\n

    Why does this matter?<\/h2>\n\n\n\n

    Becoming Shariah-compliant could attract new investors<\/strong>, especially those who only invest in Shariah-compliant stocks. This is one reason the stock has already rallied 19% this year<\/strong>.<\/p>\n\n\n\n

    Dividends remain strong <\/h2>\n\n\n\n

    Even while making these changes, FFC continues to reward investors:<\/p>\n\n\n\n

      \n
    • Dividend yield (DY): 10% expected in 2026<\/strong><\/li>\n\n\n\n
    • EPS (earnings per share)<\/strong> is forecasted at PKR 60.44 in CY26.<\/li>\n\n\n\n
    • With a target price of Rs 490, analysts expect a 22% total return<\/strong> from here.<\/li>\n<\/ul>\n\n\n\n

      Fertilizer market updates <\/h2>\n\n\n\n
        \n
      • Local DAP (fertilizer) prices<\/strong> have gone up by Rs1,100\/bag<\/strong> in 3QCY25, now at Rs14,200\/bag.<\/li>\n\n\n\n
      • International prices of raw materials like phosphoric acid have also increased. Despite this, FFC\u2019s margins are expected to remain steady at around US$285\/ton<\/strong>.<\/li>\n\n\n\n
      • On top of that, if Pakistan allows urea exports amid the current oversupply, FFC could benefit further.<\/li>\n<\/ul>\n\n\n\n

        Bottom line<\/h2>\n\n\n\n

        FFC is slowly but surely moving towards becoming Shariah-compliant, a big milestone for the company and its investors. With stable dividends, a strong market position, and improving compliance<\/strong>, FFC continues to look attractive in the long run.<\/p>\n\n\n\n

        Source: JS Global Capital Limited<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

        Fauji Fertilizer Company (FFC) is one of Pakistan\u2019s biggest fertilizer companies, well-known for its strong dividend payouts and dominance in the market. Recently, the company has been working hard to become Shariah-compliant, which means its operations and investments align with Islamic finance principles.<\/p>\n","protected":false},"author":9252,"featured_media":6691,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,155],"tags":[89],"class_list":["post-11394","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-fundamental-analysis","tag-ffc"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/FFC-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/FFC-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/FFC-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/FFC-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/11394","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=11394"}],"version-history":[{"count":1,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/11394\/revisions"}],"predecessor-version":[{"id":11395,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/11394\/revisions\/11395"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/6691"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=11394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=11394"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=11394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}