Engro Holdings Sees Growth in Towers, Fertilizers, and Coal

Engro Holdings Sees Growth in Tower Business

Engro Holdings (ENGROH) is charting an impressive course for growth across its diverse business segments, with management particularly excited about expansion prospects in telecom towers, fertilizers, and coal mining. This optimistic outlook was shared during a recent briefing with Topline Securities.

The company boasts a robust financial history, having grown its consolidated revenue at a 21% compound annual growth rate over the last six years, reaching a staggering Rs. 540 billion ($1.9 billion). Net profit also climbed steadily, increasing 19% annually to Rs. 67 billion.

A key driver of future growth is Engro’s Deodar tower business. Management highlights significant untapped potential, noting that only about 3,000 of its 10,500 towers are currently on sharing arrangements. This indicates vast capacity for future expansion and revenue generation. Projections suggest that Deodar’s EBITDA margins are expected to surpass those of Engro Enfrashare within the next three to four years. The company is also confident that satellite services pose no competitive threat in its core tower regions due to their higher operational costs. This strategic expansion comes on the heels of Engro’s recent $563 million deal with VEON Group Pakistan, a move that solidifies its position as the 16th largest independent telecom operator globally.

In the fertilizer sector, Engro is currently managing elevated inventory levels, which have reached 1.2 million tons, exceeding safety thresholds. To address this surplus, management has called on the government to permit exports after the fourth quarter of 2025. Despite the current stock, domestic fertilizer demand is anticipated to remain steady, with no significant drop expected.

Engro Powergen Thar continues to demonstrate strong financial stability, having collected an impressive 93% of all billed receivables since its inception. With outstanding receivables of Rs. 40–45 billion, the recovery rates consistently hover between 98–99%, providing clear cash flow visibility for the next two to three years. Further bolstering its energy portfolio, Sindh Engro Coal Mining Company (SEMC) is actively expanding its mine capacity from 7.6 million tons to 11.6 million tons by 2026, with ambitious plans to scale up further to 20 million tons.

Regarding its LNG terminal operations, Engro has assured that any renegotiations of the Qatar-Pakistan LNG contract will not impact its business. The terminal operates on a fixed-capacity payment model, ensuring stable revenue regardless of contract adjustments. Engro’s stock currently trades at attractive 2025E and 2026F P/E multiples of 5.2x and 6.7x, reflecting the market’s confidence in its diversified and growing ventures.