Fatima Fertilizer Company Limited (FATIMA): Steep discount to peers unwarranted; reinstate with ‘Buy’ – By BMA Research

<ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We reinstate coverage on Fatima Fertilizer Company Limited (FATIMA) with a Buy rating and DCF-based TP of PKR36.6.</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">Our Buy rating on the scrip is underpinned by; (i) key beneficiary of improvement in dynamics of overall fertilizer sector, (ii) accrual of benefits through energy efficiency initiatives, (iii) improved margin outlook, (iv) attractive valuations (CY18E P/E 5.8x), and (v) strong D/Y(9% vs. 7% for BMA Fertilizer universe).</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">Rising DAP prices is a key positive for FATIMA as it would allow the company to increase price of NP (39% contribution to revenue) and thus increase...