PACRA Maintains Entity Ratings of Engro Corporation Limited

The ratings reflect Engro Corporation Limited's ('Engro Corp' or " the Company") robust risk profile and strong liquidity position. In Jan25, Engro Holdings Limited (formerly Dawood Hercules Corporation Limited) and Engro Corporation Limited successfully completed a corporate restructuring, pursuant to which Engro Corporation Limited became a wholly owned subsidiary of Engro Holdings Limited. Prior to this, in Dec24, the parent entity, Dawood Hercules Corporation Limited, was renamed as Engro Holdings Limited. Before the restructuring, the Dawood Group held a (~48.05%) stake in Engro Corporation through Engro Holdings Limited (~39.97%), associated entities (~2.90%), and Dawood family individuals (~5.73%). The remaining ~51.5% was held by DFIs, banks, insurance companies, funds, and the general public. Under the restructuring arrangement, shares of Engro Corporation (excluding those held by Engro Holdings Limited) were exchanged for shares of Engro Holdings Limited at a swap ratio of 2.24 Engro Holdings shares for each Engro Corp share. As a result, Engro Holdings issued ~722.9 million new ordinary shares, making Engro Corporation a wholly owned subsidiary of Engro Holdings Limited. Following this transaction, Engro Corporation was delisted from the Pakistan Stock Exchange.
Engro is among Pakistan’s largest conglomerates, with a diversified business portfolio encompassing key sectors including: fertilizer, petrochemicals, energy, telecommunication infrastructure and food & agriculture. Engro’s core subsidiaries continued to contribute significantly to the Group’s overall performance. Engro Fertilizers, a leading Pakistani producer of urea, DAP, and NPK fertilizers, demonstrated resilience despite lower sales volumes due to reduced farmer purchasing power stemming from the wheat crisis and urea price disparity in CY22. Engro Polymer & Chemicals (EPCL), the sole PVC manufacturer in Pakistan, achieved a 4% year-on-year increase in domestic sales despite a volatile market environment. Engro Energy Limited’s portfolio includes three key subsidiaries: Engro Powergen Qadirpur (EPQL), operating a 217 MW gas-fired power plant at Deh Belo Sanghari with a focus on lower emissions; Engro Powergen Thar (EPTL), managing 2 x 330 MW coal-fired power plants at Thar Block II; and Sindh Engro Coal Mining Company (SECMC), which operates a coal mining facility at Thar supplying coal to EPTL. Engro Enfrashare maintained its growth trajectory by expanding its tower portfolio and sustaining a strong tenancy ratio of 1.26x. Engro Eximp FZE played a vital role in facilitating international trade. Engro Terminals increased its processing volumes, securing a 60% share of the LPG market and contributing approximately 15% of Pakistan’s LNG supply. FrieslandCampina Engro Pakistan delivered improved profitability through strategic cost efficiencies and consumer-driven innovation, despite the imposition of an 18% sales tax on UHT milk. Engro Corporation Limited recorded strong dividend inflows primarily from Engro Fertilizers Limited (73.8%), which contributed significantly to the parent’s profitability and cash flow position. The ratings take into account Hold Co’s strong organizational structure, meticulously crafted to steer the strategic trajectory of its subsidiaries, alongside a resilient governance framework.
The ratings are dependent on the management's ability to execute its envisaged strategy of growth and expansion amidst prevailing economic environment. Sustainability in the performance of subsidiaries, stable dividends and effective management of financial profile is important.

About the Entity
As of January 2025, following a corporate restructuring, Engro Corporation Limited became a wholly owned subsidiary of Engro Holdings Limited. The Board is chaired by Mr. Hussain Dawood, the patriarch of Dawood Family, while Mr. Ahsan Zafar serves as the President and Chief Executive Officer of the Company.