BMAFlashnote

ResearchEntityNotificationNumber:REP005

EFERT:1QCY16earningsclockinatPKR1.6,down31%YoY

Monday April 25,2016

EngroFertilizersLimited(EFERT)reportedNPATofPKR2.1bn(EPS:PKR1.6)for1QCY16
against NPAT of PKR3.1bn (EPS: PKR2.3) in the same period last year, depicting a
declineof31%YoY

The decline in earnings was primarily due to 29%YoY lower topline on account of
declineinureaofftakecoupledwith2%YoYlowereffectiveureaprice.

OnaQoQbasis,earningsdepicteda63%declineasrevenueslumped64%QoQdueto
seasonal factors and inherent slowdown in urea demand. At the same time, 210bps
QoQincreaseineffectivetaxratealsosubduedearnings.Thatsaid,25%QoQdeclinein
financialcostsmitigatedtheoveralldeclineinearnings.

While we currently have an Overweight stance on EFERT with a target price of

PKR99/sh, the scrips price performance may remain limited in the near term on
accountofdismalbusinessoperatingconditions.

FinancialSummary
1QCY16

4QCY16

1QCY15

12,605

35,339

64%

17,673

29%

G.P

4,938

11,429

57%

6,770

27%

PBT

3,088

8,038

62%

4,592

33%

PAT

2,121

5,692

63%

3,059

31%

EPS

1.6

4.3

63%

2.3

31%

(PKRmn)
Sales

Source:PSX,BMAResearch

SajjadHussain
sajjad.hussain@bmacapital.com
+92111262111Ext:2062

BMACapitalManagementLtd.801Unitower,I.I.ChundrigarRoad,Karachi,74000,PakistanForfurtherqueries,pleasecontact:
bmaresearch@bmacapital.comorcallUAN:+9221111262111

www.jamapunji.pk
1

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Ratingdefinitions

Overweight

Totalstockreturn>expectedmarketreturn+2%

Marketweight

Expectedmarketreturn2%

Underweight

Totalstockreturn<expectedmarketreturn2%

*Totalstockreturn=capitalgain+dividendyield

Oldratingsystem(discardedeffectiveFeb2916)

Buy

>20%upsidepotential

Accumulate

>=5%to<=20%upsidepotential

Hold

<5%to>5%potential

Reduce

<=5%to>=20%downsidepotential

Sell

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Discountedcashflow(DCF,DDM)
RelativeValuation(P/E,P/B,P/Setc.)
Equity&Assetreturnbasedmethodologies(EVA,ResidualIncomeetc.)