Urea sales likely up 20% in June

By MG News | July 07, 2025 at 10:00 AM GMT+05:00
July 07, 2025 (MLN): Fertilizer industry is estimated to have posted a 20% YpY recovery in Urea off-take for June 2025, reaching 580,000 tons, amid seasonal Kharif demand, improved irrigation conditions, and increased agri-financing.
However, sector analysts caution that overall first-half performance remains underwhelming, with cumulative Urea sales likely down 23% YoY to 2.35 million tons.
The projections, published by JS Global Capital in a July 4 research note, suggest that Engro Fertilizers Ltd. (EFERT) may have captured market momentum with an estimated 32% YoY growth in June off-take to 205,000 tons, while Fauji Fertilizer Company Ltd. (FFC) is expected to have posted a modest 4% YoY gain to 269,000 tons.
EFERT’s estimated market share rose to 35%, up 3 percentage points from last year, as FFC’s share contracted by 8 points.
Despite the apparent rebound, Urea inventories are expected to remain elevated at around 1.3 million tons by end-June- potentially the highest first-half inventory since 2016.
According to JS analysts, this oversupply could revive export discussions as a policy lever to mitigate the buildup heading into the second half of the year.
“Assuming assuming stable capacity utilization, exports remain a key trigger for the sector even with an expected normalization in demand during 2HCY25,” the note said.
On the phosphate side, Di-Ammonium Phosphate (DAP) sales are projected to have declined 15% YoY in June to 104,000 tons due to high prices and seasonal moderation.
Local DAP prices have climbed to Rs13,000/bag, up 10% year-to-date, in response to a 25% YoY rise in global DAP prices and 19% uptick in phosphoric acid rates.
EFERT raised its DAP price by Rs200/bag starting July 1.
Market Snapshot (CY25E):
Company | Est. P/E | Dividend Yield | Market Cap (Rs mn) |
---|---|---|---|
FFC | 7.5x | 10% | 588,797 |
EFERT | 8.8x | 12% | 259,782 |
Note: Figures are based on provisional estimates and internal analysis by JS Global Capital.
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