Karachi: The profitability of Pakistan's fertilizer sector is predicted to soar by 25% year-over-year in the second quarter of the calendar year 2025, driven largely by increased offtakes, according to a recent forecast by AKD Securities Limited.

The report highlights notable gains across the sector, particularly for major players such as Fauji Fertilizer Company (FFC), Engro Fertilizers (EFERT), and Fatima Fertilizer Company Limited. Post-merger, FFC is expected to see a 14% increase in profitability compared to the previous year. Meanwhile, EFERT and FATIMA are projected to experience substantial earnings growth, with surges of 3.6 times and 2.3 times year-over-year, respectively.

In terms of shareholder returns, EFERT and FATIMA are anticipated to increase their payouts by 50% and 45% year-over-year, distributing dividends of PkR4.5 and PkR4.0 per share, respectively. Conversely, FFC's dividend is expected to remain steady, maintaining a distribution of PkR9.0 per share.

AKD Securities has issued a 'BUY' recommendation for FFC and EFERT, setting a target price for December 2025 at PkR583 and PkR242 per share, respectively. This optimistic outlook underscores the robust performance and potential growth within the fertilizer sector, driven by strategic mergers and increased market demand.