Engro Corporation Limited (ENGRO): Surplus cash deployment to unlock valuations – ‘Buy’ – By JS Research
<ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We reiterate our ‘Buy’ rating on Engro Corporation (ENGRO)
with a revised Target Price of Rs376 (previously Rs400), where we believe concerns
over potential re-investment of funds (Rs61bn or Rs117/share) have been
overplayed.</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We are of the view that funds are not likely to remain
invested in Term Deposits (effective yield of ~6%), and will eventually be
invested in higher yielding projects.</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We build-in Rs145/share value from potential re-investments,
where we eye at least 16% ROE from projects totaling Rs150bn (assuming D/E of
60/40).</span></li><li><span style="font-...
