Revising Target Price to PKR 109.50 and Adopting Positive Stance
Fauji Fertilizer Company Limited (FFC) registered an earnings of PKR 2,450m (EPS: PKR 1.93) for 2QCY18.Alongside results, the company also announced an interim DPS of PKR 1.40.The company’s earnings in 2QCY18improved due to i) higher volumetric sales of DAP, ii) higher selling price, and iii) lower finance costs. We have revised our assumptions for upcoming period after incorporating i) company’s latest financials, ii) recent increase in Urea and DAP prices and iii) PKR devaluation against USD. Our revised target price for June 2019 is PKR 109.50/share (previous target price for December 2018 was PKR 106.50/share), which offers an upside of 13.19% from the stock’s last closing price; hence, we are adopting a positive stance on the scrip.
Fauji Fertilizer is engaged in the manufacturing, purchasing and marketing of fertilizers including the investment in other fertilizer manufacturing operations. As of Dec 31 2004, Co. had a design capacity of 2,455,000 tonnes for urea production and 445,000 tonnes for DAP production.
Ismail Iqbal Securities (Private) Limited (IISPL) is a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL provides comprehensive financial services including Equity Sales, Research on Equities and the Macro-Economy, Investment Advisory, Portfolio Management, Corporate Finance, and extensive services for Private Equity investors. IISPL services a diversified client base, from Institutional to Retail Investors including High Net worth Individuals.
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