Karachi: Engro Fertilizers (EFERT) convened its Corporate Briefing Session for the second quarter of 2026, focusing on the company's financial performance and future strategies. Management highlighted ongoing discussions regarding gas supply arrangements beyond the current contract and addressed the company's elevated debt-to-equity ratio, which is projected to normalize by the end of the year.

According to JS Global, despite high inventory levels, EFERT management is optimistic about strong sales volumes to clear existing stock without reducing the current Rs150 per bag price premium over competitors. The company foresees regaining market share through robust urea demand, although DAP demand may remain low due to high international sulphur prices. Urea volumes witnessed a 22% year-on-year decline, while DAP volumes fell by 17% in the first half of 2026.

EFERT recorded an increase in gross margins to 35.8% in the second quarter, attributed to strategic pricing actions amidst a higher gas cost structure. The Pressure Enhancement Facility project is advancing, with completion expected by the third quarter of 2026 and operational readiness by the first quarter of 2027. The company's engagement platform, Engro markaz, has expanded to include 1,957 farmers and 10 stores, with plans for further growth.

The company declared a second interim dividend of Rs1.75 per share for the second quarter, totaling Rs3.75 per share for the first half of 2026. Despite challenges, EFERT maintains a positive outlook and continues to hold a buy recommendation.