External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

Topline Securities is one of the fastest growing brokerage houses in Pakistan. It has strong equity brokerage, economic / equity research, mutual fund distribution, commodity trading and corporate finance & advisory functions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul>
<li>Pakistan's urea sales in Sep 2026 are expected to rise 43% YoY but down 13% MoM, with volumes of 611k tons.</li>
<li>We believe the MoM decline is primarily attributable to the seasonal impact in our view.</li>
<li>Industry urea inventory is likely to fall at 9 months low, clocking in at 0.65mn tons in Sep 2026 vs 0.75mn in Aug 2026.</li>
</ul>


Pakistan's urea sales in Sep 2026 are expected to rise 43% YoY but down 13% MoM, with volumes of 611k tons.
We believe the MoM decline is primarily attributable to the seasonal impact in our view.
Industry urea inventory is likely to fall at 9 months low, clocking in at 0.65mn tons in Sep 2026 vs 0.75mn in Aug 2026.


Pakistan Fertilizers: Urea Sales for Sep 2026 Expected at 611k Tons, up 43% YoY

Equity Bottom-Up

Fauji Fertilizer Company / Equity Bottom-Up

<ul><li>Fauji Fertilizer (FFC) conducted its Corporate Briefing Session for 2Q2026 today, where management discussed financial performance and outlook.</li><li>Management expects industry urea demand to remain stable, with offtakes reaching 6.6mn tons in 2026, down 2% compared to 2025. However, DAP demand could be hurt due to higher prices led by a surge in international sulphur prices, as 50% of sulphur used to come from the Middle East, which has been impacted by the geopolitical situation.</li><li>We maintain a buy stance on FFC, with the stock currently trading at a 2026E P/E of 8.7x and a dividend yield of 9%.</li></ul>

Fauji Fertilizer (FFC) conducted its Corporate Briefing Session for 2Q2026 today, where management discussed financial performance and outlook.Management expects industry urea demand to remain stable, with offtakes reaching 6.6mn tons in 2026, down 2% compared to 2025. However, DAP demand could be hurt due to higher prices led by a surge in international sulphur prices, as 50% of sulphur used to come from the Middle East, which has been impacted by the geopolitical situation.We maintain a buy stance on FFC, with the stock currently trading at a 2026E P/E of 8.7x and a dividend yield of 9%.

Topline Flash Note: Fauji Fertilizer Co (FFC) – Corporate Briefing Key Takeaways

Cross Asset Strategy

<ul><li>KSE-100 index companies posted earnings of Rs609bn in 4QFY26, up 34% YoY and 20% QoQ.</li><li>The E&P sector witnessed significant boost in profitability, surging 2.6x YoY and 2.3x QoQ to Rs214.2bn, mainly driven by a huge tax reversal following the FCC’s decision on super tax.</li><li>This takes the FY26 dividends to Rs904.4bn, up 11% with a payout ratio of around 45%.</li></ul>

KSE-100 index companies posted earnings of Rs609bn in 4QFY26, up 34% YoY and 20% QoQ.The E&P sector witnessed significant boost in profitability, surging 2.6x YoY and 2.3x QoQ to Rs214.2bn, mainly driven by a huge tax reversal following the FCC’s decision on super tax.This takes the FY26 dividends to Rs904.4bn, up 11% with a payout ratio of around 45%.

Pakistan Strategy - Corporate Profitability Up 34% in 4QFY26; FY26 Earnings Up 23%; Dividends Up 11%

<ul><li>Fauji Fertilizer Company (FFC) announced its 2Q2026 financial result today, wherein the company recorded the unconsolidated quarterly profit of Rs24.4bn (EPS: Rs16.94), down 3% YoY but up 39% QoQ.</li><li>The 2Q2026 result came higher than industry expectations primarily due to higher-than expected Other Income.</li><li>We maintain Buy stance on FFC with the company currently trading at a 2026E P/E of 8.2x and dividend yield of 9%.</li></ul>

Fauji Fertilizer Company (FFC) announced its 2Q2026 financial result today, wherein the company recorded the unconsolidated quarterly profit of Rs24.4bn (EPS: Rs16.94), down 3% YoY but up 39% QoQ.The 2Q2026 result came higher than industry expectations primarily due to higher-than expected Other Income.We maintain Buy stance on FFC with the company currently trading at a 2026E P/E of 8.2x and dividend yield of 9%.

Fauji Fertilizer Company (FFC): 2Q2026 EPS at Rs16.94, Down 3% YoY (Earnings Higher Than Industry’s Expectations)

<ul><li>We have revised up our earnings estimates for the fertilizer sector by an average of ~13% for 2026E-2028F.</li><li>Improved urea offtakes: Our upward revision in sales volumes reflects stronger-than-expected agricultural activity and resilient domestic demand amidst improved crop prices.</li><li>Urea price revisions: Besides rolling back discounts of Rs150-400/bag (varying company wise), we have also increased MRP of urea following hike of Rs100/bag, marking the first hike in last two years.</li></ul>

We have revised up our earnings estimates for the fertilizer sector by an average of ~13% for 2026E-2028F.Improved urea offtakes: Our upward revision in sales volumes reflects stronger-than-expected agricultural activity and resilient domestic demand amidst improved crop prices.Urea price revisions: Besides rolling back discounts of Rs150-400/bag (varying company wise), we have also increased MRP of urea following hike of Rs100/bag, marking the first hike in last two years.

Pakistan Fertilizer Sector: Earnings Revised Upward; Overweight Maintained

Pakistan

Fauji Fertilizer Company Limited manufactures, purchases and markets fertilizers.

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Fauji Fertilizer Company (FFC PA)

Pakistan Fertilizers: Urea Sales for Sep 2026 Expected at 611k Tons, up 43% YoY

Pakistan's urea sales in Sep 2026 are expected to rise 43% YoY but down 13% MoM, with volumes of 611k tons. We believe the MoM decline is...

Topline Securities

Topline Flash Note: Fauji Fertilizer Co (FFC) – Corporate Briefing Key Takeaways

Fauji Fertilizer (FFC) conducted its Corporate Briefing Session for 2Q2026 today, where management discussed financial performance and...

Topline Securities

Pakistan Strategy - Corporate Profitability Up 34% in 4QFY26; FY26 Earnings Up 23%; Dividends Up 11%

KSE-100 index companies posted earnings of Rs609bn in 4QFY26, up 34% YoY and 20% QoQ. The E&P sector witnessed significant boost in...

Topline Securities

Fauji Fertilizer Company (FFC): 2Q2026 EPS at Rs16.94, Down 3% YoY (Earnings Higher Than Industry’s Expectations)

Fauji Fertilizer Company (FFC) announced its 2Q2026 financial result today, wherein the company recorded the unconsolidated quarterly profit of...

Topline Securities

Pakistan Fertilizer Sector: Earnings Revised Upward; Overweight Maintained

We have revised up our earnings estimates for the fertilizer sector by an average of ~13% for 2026E-2028F. Improved urea offtakes: Our upward...

Topline Securities

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