⚡ Flash Summary

Engro Holdings Limited’s Q3 2025 analyst briefing highlights macroeconomic progress in Pakistan under the IMF program. The economic environment demonstrates continued strengthening, with real GDP growing by ~2.68% in FY25. Monetary policy remains steady at 11.0%, and Pakistan’s rating improved to Caa1. However, inflation has risen to ~5.6% YoY in Sept 2025, driven by food prices, and geopolitical volatility remains a concern.

📌 Key Takeaways

• 📈 Pakistan’s real GDP grew by ~2.68% in FY2025, versus the government’s target of 3.6%.
• 🏦 Monetary policy rate held at 11.0%, Pakistan’s rating improved to Caa1 by Moody’s.
• 💰 IMF staff-level agreement for another $1.2 billion, pending board approval, raising total disbursements to ~$3.3 billion.
• ⚠️ Inflation has risen to ~5.6% YoY in Sept 2025, driven primarily by a notable rebound in food.
• 🌍 Heightened geopolitical volatility stemming from cross-border security risks with Afghanistan.
• 🚀 KSE-100 stormed to an all-time high of 165k points in September, with ~104% gain since September 2024.
• 🌊 The economic impact of the floods appears to be limited outside of Punjab.
• 🌎 World Bank forecasts 3.1% and IMF projects 3.6% economic growth for FY26.
• ⚠️ SBP likely to continue cautious easing if inflation remains under control.
• 🔄 Continued reserve rebuilding expected from rollovers and inflows.
• 📊 ADP anticipates FY 2026 inflation to be at 6%.
• ⚠️ Instability could drive up commodity and logistics costs and erode investor confidence if conditions worsen.
• 💪 Momentum may continue coupled with increased FDI, subject to a stable geopolitical environment.
• 🚑 Emergency response and reconstruction are underway, and improved water avails to benefit farm economy.

🎯 Investment Thesis

Given the mixed signals of economic improvement alongside rising inflation and geopolitical risks, a HOLD recommendation is appropriate for Engro Holdings. While the macroeconomic environment shows some positive trends, the uncertainties warrant a cautious approach. A price target cannot be reasonably established without company-specific financial data.