Karachi: The fertilizer sector in Pakistan has faced significant challenges in the first quarter of the calendar year 2025, underperforming against the KSE-100 index due to reduced demand and unfavorable agricultural conditions. An analysis of four major listed fertilizer companies—Fauji Fertilizer Company Limited (FFC), Engro Fertilizers Limited (EFERT), Fatima Fertilizer Company Limited (FATIMA), and Agritech Limited (AGL)—reveals a 26% decrease in topline revenues year-on-year, totaling Rs153 billion.

The decline in sales was attributed to weak volumes, with Urea and DAP sales plummeting by 40% and 48% respectively compared to the same period last year. Notably, FFC was an exception, reporting a 9% increase in topline growth driven by higher volumes following a merger. In contrast, EFERT, FATIMA, and AGL experienced significant declines in revenue by 59%, 21%, and 18%, respectively.

Overall, the earnings of these companies fell by 8% year-on-year to Rs24 billion. However, there are expectations of a demand recovery in the coming months, spurred by improved water availability, the Kharif crop season, and the disbursement of loans through the Kissan Card program.

Projections for Urea sales indicate a potential closure at approximately 6 million tons for the year, reflecting an 8% decrease from the previous year. Despite the current challenges, EFERT and FFC are highlighted as companies to watch, with anticipated attractive yields of 14% and 12% for the year 2025.