JS Securities Limited – Morning Briefing

Karachi, November 06, 2018 (PPI-OT): Fertilizer: Urea sales expected to increase 29% YoY in Oct-2018

Domestic urea offtake in Oct-2018 is expected at ~486k tons, up by a healthy 29% YoY.

Urea production is estimated at 557k tons primarily due to resumption of operations by DH Fertilizers and Agritech limited (AGL).

Cumulative sales during 10M2018 in urea is expected to grow 2% YoY to 4.6mn tons. FFBL and EFERT are expected to outperform its peers with off-take accretion of 18% YoY and 15% YoY, respectively.

DAP sales are expected at 518k tons; up 34% YoY, while production and cumulative imports are anticipated around 460k tons, respectively.

That said inventory levels of Urea industry as at October-2018 are expected to clock in at 186K tons, while DAP inventory in the same period is estimated to settle at 671k tons.

Urea Sales likely to grow to 482k in Oct-2018

Domestic urea offtake for Oct-2018 is expected at ~486k tons, up by a healthy 29% YoY. The primary reason for significant growth in urea sales is commencement of Rabi season. Moreover, production in the said segment is estimated at 557k tons; up by 25% from 2018 average of 445k tons. This uptick in production was majorly due to resumption of operations by DH Fertilizers and Agritech Limited (AGL), which manufactured approximately 40k tons and 32k tons, respectively. Cumulative urea offtake during 10M2018 is expected to inch up by 2% YoY to 4.62mn tons as compared to 4.52mn tons in the corresponding period last year.

FFC may continue to outperform

FFC could remain a major contributor to industry sales with expected offtake of 218k tons (+17% YoY) followed by EFERT 135k tons (8% YoY). Additionally, sales of FATIMA (both plants) are estimated to post off-take growth of 11x to 59k tons. Cumulatively, Fauji Fertilizer Bin Qasim (FFBL) and EFERT are anticipated to post surge in sales by 18% and 15% YoY, respectively.

DAP sales growth likely to turn positive

DAP offtake in the month is estimated to grow by massive 34% YoY to 518k tons as compared to 387k tons in the corresponding period last year. Production and imports are anticipated at ~460k tons taking DAP inventory to 671k tons as at end of Oct-2018. Cumulatively, during 10M2018, offtake growth may continue to remain positive with sales expected to increase 3% YoY to 1.78mn tons as compared to 1.72mn tons in the same period last year.

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JS Securities Limited – Morning Briefing

Karachi, November 06, 2018 (PPI-OT): Fertilizer: Urea sales expected to increase 29% YoY in Oct-2018

Domestic urea offtake in Oct-2018 is expected at ~486k tons, up by a healthy 29% YoY.

Urea production is estimated at 557k tons primarily due to resumption of operations by DH Fertilizers and Agritech limited (AGL).

Cumulative sales during 10M2018 in urea is expected to grow 2% YoY to 4.6mn tons. FFBL and EFERT are expected to outperform its peers with off-take accretion of 18% YoY and 15% YoY, respectively.

DAP sales are expected at 518k tons; up 34% YoY, while production and cumulative imports are anticipated around 460k tons, respectively.

That said inventory levels of Urea industry as at October-2018 are expected to clock in at 186K tons, while DAP inventory in the same period is estimated to settle at 671k tons.

Urea Sales likely to grow to 482k in Oct-2018

Domestic urea offtake for Oct-2018 is expected at ~486k tons, up by a healthy 29% YoY. The primary reason for significant growth in urea sales is commencement of Rabi season. Moreover, production in the said segment is estimated at 557k tons; up by 25% from 2018 average of 445k tons. This uptick in production was majorly due to resumption of operations by DH Fertilizers and Agritech Limited (AGL), which manufactured approximately 40k tons and 32k tons, respectively. Cumulative urea offtake during 10M2018 is expected to inch up by 2% YoY to 4.62mn tons as compared to 4.52mn tons in the corresponding period last year.

FFC may continue to outperform

FFC could remain a major contributor to industry sales with expected offtake of 218k tons (+17% YoY) followed by EFERT 135k tons (8% YoY). Additionally, sales of FATIMA (both plants) are estimated to post off-take growth of 11x to 59k tons. Cumulatively, Fauji Fertilizer Bin Qasim (FFBL) and EFERT are anticipated to post surge in sales by 18% and 15% YoY, respectively.

DAP sales growth likely to turn positive

DAP offtake in the month is estimated to grow by massive 34% YoY to 518k tons as compared to 387k tons in the corresponding period last year. Production and imports are anticipated at ~460k tons taking DAP inventory to 671k tons as at end of Oct-2018. Cumulatively, during 10M2018, offtake growth may continue to remain positive with sales expected to increase 3% YoY to 1.78mn tons as compared to 1.72mn tons in the same period last year.

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