Islamabad: Fauji Fertilizer Company Ltd. (FFC) reported a significant increase in its third-quarter earnings for the calendar year 2026, showcasing unconsolidated earnings of PkR22.3 billion. This marked a 16 percent year-on-year growth, largely attributed to improved gross margins and an increase in other income. Additionally, the company declared an interim cash dividend of PkR18.5 per share, raising the nine-month payout to PkR41.5 per share, the highest payout ratio since 2014.

According to AKD Securities Limited, FFC's revenue for the third quarter stood at PkR127.7 billion, remaining flat year-on-year despite a decline in offtakes for Urea and DAP by 9 percent and 19 percent, respectively. The stability in revenue was supported by higher prices across nutrient categories. Gross margins were reported to have expanded from 30.8 percent in the same period last year to 33.6 percent, driven by a higher proportion of urea in the sales mix along with elevated pricing.

AKD Securities maintains a 'BUY' recommendation on FFC, with a target price of PkR801 per share by December 2026. The positive outlook is based on several factors, including structurally lower gas costs that enhance margins, a recovery in nutrient offtakes due to improving farm economics, and consistent dividend income from the company's power and banking subsidiaries.