FATIMA Fertilizer’s Strategic Growth and Financial Health Signal Strong Future

Islamabad, FATIMA Fertilizer is positioned for significant growth and operational efficiency in the coming year, as outlined by AKD Securities Limited. The company's proactive strategies, including the conservative utilization of its Sheikhupura plant at 70% due to potential gas curtailment risks, are expected to result in total sales volumes of 2.5 million tons across urea, NP, and Can products from all three plants in CY24.

According to AKD Securities Limited, FATIMA's primary Sadiqabad plant, which accounts for 51% of the company's total urea capacity, benefits from its operation on Mari network gas. With the anticipated alignment of Mari gas prices to SNGP's network price of PKR 1,597/mmbtu for both feed and fuel starting from the second quarter of CY24, a corresponding increase in urea prices to approximately PKR 5,000 per bag is expected. This adjustment is likely to further bolster the company's financial performance.

Additionally, FATIMA has made significant strides in reducing its total debt, from PKR 25.5 billion in December 2022 to PKR 13.1 billion by the end of September 2023. This substantial reduction in indebtedness is projected to halve the company's financial charges in CY24, enhancing its earnings potential.

AKD Securities Limited has issued a 'Buy' rating on FATIMA's stock, with a December 2024 target price of PKR 47 per share. This represents a 21% upside from the last done closing price, coupled with a notable CY24 dividend yield of 14.1%. FATIMA Fertilizer's strategic initiatives and improving financial health underscore its rising prominence in the sector, promising robust returns for investors in the foreseeable future.