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Fauji fertilizer Company ROI

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Research report is prepared by IBBP for its client and some portion is shared with public

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Fauji fertilizer Company ROI

  1. 1. 1 Invest Beyond Boundaries Pakistan investbbp@yahoo.com ROI - Fauji Fertilizer Company Research Report -IBBP IBBP (Investment beyond borders Pakistan) picks Fauji Fertilizer Company on its radar and investigate its price stability. While taking this task, certain fundamentals of company have been analyzed below giving a comparison with some other type of investment in return. 1. FFC Case. For analysis purpose it has been assumed that an investor had Rs 10,000 in hand and bought 100 shares of FFC in year 2004. Investor is carrying his shareholding till to date. Expansion in his shareholder ship and dividend income in the backdrop of payouts given by company will be:- year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dividend ( in Rupee) 15 12 10 11 13.7 13.1 13 20 15.5 15.35 7 Bonus in % 30 40 25 10 25 50 Increased shareholding with bonus 130 182 228 250 310 460 Dividend earned in rupees 1500 2184 1820 2002 2490 2990 3250 6200 7130 7061 3220 Source http://www.ffc.com.pk/dividend-detailsbook-closure.aspx 460 shares held now taking into account bonus given time to time. While taking 110 share value of today, the market value of 460 shares is 50,600. In same period an amount of Rs 39847 is as dividend. This takes the figures to Rs 90,000 for 100 shares of FFC bought 11 years back in 2004.
  2. 2. 2 2. Term Deposit s & Saving Schemes Returns. Investment in Term deposit or saving scheme is taken as one of the safe and assured means of returns. The details of returns are:- year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Interest rate % 10.1 11.04 11.5 11.6 15 16 14.6 14.4 14.6 13.4 14.1 Profit in rupee 1000 1100 1200 1160 1500 1600 1460 1440 1460 1350 1400 In this case Rs 15,000 rupees approximately comes as a return on investment of Rs 10,000. Defense saving certificates and Behbood Certificates returns approximately 22,000 rupees. 3. Buying US $. General perception is that buying dollar never gives you loss and many people consider this as one of the best investment. Here is dollar rupees parity taken from year 2004:- During under review period dollar doubled up giving 100 % return to those holding dollar. 4. Gold
  3. 3. 3 During under researched period gold prices were multiplied by three. In this specific case rupee- dollar parity effects have been ignored for drawing conclusions. 5. Comparison of ROI How FFC makes it possible 1. FFC is major player directly and even in collaboration with FFBL in fertilizer sector. Significant share is of FFC in fertilizer sector.
  4. 4. 4 2. Market leader in Urea 3. Shareholding Pattern S / No Categories of share holders 2011 in % 2012 in % 2013 in % NIT & ICP 3.91 3.30 2.80 Banks, DFI, NBFI 6.57 6.60 7.0 Insurance companies 10.45 10.58 10.83 Mudarbas and mutual funds 2.56 1.80 1.11 Foreign investors 7.19 8.22 7.80 Charitable trust t & others 48.10 47.88 48 Others 6.38 4.38 1.79 Individuals 14.84 17.78 20.67
  5. 5. 5 4. Persistent earning pattern with payout ratio of 97% approximately (basing on 2013)
  6. 6. 6 Threats to Fertilizer Sector
  7. 7. 7 Future outlook of FFC Disclaimer Report is prepared for our institutional and foreign clients and some significant portions are not being shared. IBBP will not be responsible for any loss realized at any point of time with investment base taken on this report.

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