Engro Holdings Limited recorded a 41% year-on-year (YoY) decline in consolidated profit after tax to Rs. 18.6 billion during the first half of calendar year 2026 (1HCY26), compared with Rs. 31.6 billion in the same period last year.

Earnings per share (EPS) fell to Rs. 15.46 from Rs. 26.23.

Despite the decline in profit, the company’s revenue increased 5% YoY to Rs. 259.3 billion from Rs. 247.3 billion. Gross profit also rose 31% to Rs. 72.7 billion.

According to Arif Habib Limited, higher costs and a significant drop in other income put pressure on the company’s bottom line.

Second-Quarter Profit Falls 70%

Engro Holdings’ consolidated profit after tax fell 70% YoY to Rs. 8.97 billion in 2QCY26, compared with Rs. 29.76 billion in the same quarter last year.

EPS declined to Rs. 7.45 from Rs. 24.71.

The weaker quarterly performance was mainly linked to higher-than-expected cost of sales and increased administrative expenses.

The company’s total borrowings also jumped 36% YoY to Rs. 392 billion, largely due to financing for its telecom tower business. Finance costs increased 5% to Rs. 12.7 billion.

Fertilizer Business Also Weakens

Engro Fertilizers (EFERT) reported a 32% YoY decline in 2QCY26 profit to Rs. 3.8 billion, mainly due to weaker fertilizer sales.

Its net sales fell 34% YoY and 13% quarter-on-quarter. However, earnings received a boost from a one-off Rs. 1.8 billion gain related to the remeasurement of a provision for Sui Northern Gas Pipelines Limited.

Tower Business Adds Rs. 3 Billion

Engro Holdings’ other businesses continued to contribute to earnings.

Engro Polymer and Chemicals Limited (EPCL) contributed Rs. 706 million to second-quarter earnings, while FrieslandCampina Engro Pakistan Limited (FCEPL) contributed Rs. 1.02 billion.

The telecom tower business contributed approximately Rs. 3 billion during the quarter.

Arif Habib Limited maintained a “Buy” rating on Engro Holdings and set a June 2027 target price of Rs. 360 per share.