Karachi: ENGROH has announced a significant share buyback initiative, aiming to repurchase up to 45 million ordinary shares through the Pakistan Stock Exchange at spot prices. This move, approved by the company's board, represents 3.7% of total outstanding shares and 4.7% of its free float, with the purpose of cancelling the shares. The repurchase period is set to take place from May 7, 2026, to October 25, 2026.
According to AKD Securities Limited, the estimated buyback size is over PKR 12 billion based on the last closing price. This initiative is seen as a reflection of ENGROH's strong cash generation capabilities, bolstered by dividend inflows from entities such as EPTL, EFERT, and SECMC. Furthermore, ENGROH has received an expression of interest for acquiring a 56.2% stake in EPCL as of March 2026, which could potentially enhance its cash reserves. In February 2026, the company divested an 18.5% shareholding in EPQL.
The buyback is considered a positive step for distributing shareholder value through a tax-efficient mechanism. As a result, the company's dividend forecast for CY26 has been revised from PKR 10 per share to nil, with the expectation that a similar quantum will be distributed through the buyback. Previously, ENGROH did not announce any cash dividends with its CY25 results due to funding requirements related to the 'Deodar' transaction.
From an investment perspective, AKD Securities Limited maintains a 'BUY' stance on ENGROH with a December 2026 target price of PKR 351 per share. The positive outlook is supported by the turnaround of the telecom segment, stable earnings from the energy portfolio, recovery in fertilizer offtakes bolstering EFERT's profitability, and portfolio realignment towards more value-enhancing segments.
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