Monumentalist

Investment Analysis: AGRA LIMITED (NSX: AGR)

Date: 9 January 2026 Analyst: [Gemini]

â ï¸ EXCHANGE NOTICE: Agra Limited is primary listed on the Namibian Stock Exchange (NSX). While the Namibian Dollar (NAD) is pegged 1:1 to the South African Rand (ZAR), South African investors should be aware that this is an external listing. Trading may require a broker with access to the NSX (e.g., PSG, various bank brokers), and liquidity is significantly lower than JSE main board stocks.

Step 1: Data Gathering & Source Verification

Reporting Period: Audited Consolidated Financial Results for the year ended 31 July 2025 (Published 24 October 2025).
SENS/News Announcements Reviewed (L12M):
Dividend Declaration (28 Nov 2025) â Final dividend of 22.5 cents declared.
Annual General Meeting Results (28 Nov 2025) â Confirming strong shareholder support.
Trading Statement (Oct 2025) â Signaling the record profit jump.

Step 2: Metric Extraction

Market Cap: ~N$422 million (Micro Cap)
Share Price: 413 cents (N$4.13) â Price data as of closing 8 Jan 2026.
Dividend Yield (L12M): 5.4%
Calculation: Annual Dividend of 22.5 cents (Paid Dec 2025).
Note: The company typically pays dividends annually. The dividend grew by 67% from the previous year (13.5c).
Liquidity Check: CRITICAL RISK / ILLIQUID
Average Daily Volume: Very thin (~40k shares/day average, but often zero on many days).
Flag: This is a classic "local champion" stockâtightly held by Namibian farmers and institutions. It is extremely difficult to build or exit a large position without moving the price.
P/E Ratio: 3.6x
Calculation: Price (413c) / FY2025 HEPS (113 cents).
Analysis: Extremely undervalued relative to earnings power, pricing in a massive "illiquidity discount."
Net Asset Value (NAV): 786 cents per share
Price-to-NAV: 0.52x.
Discount: The stock trades at a roughly 48% discount to the value of its net assets.

Step 3: Operational & Strategic Analysis

Business Overview Agra is the dominant agricultural service provider in Namibia. It operates a cooperative-style model (though it is a public company) with three main pillars:

Retail & Wholesale: 20+ retail branches supplying inputs, fuel, and equipment to farmers.
Auctions: The primary marketplace for Namibian livestock trading.
Properties: Owns a significant portfolio of commercial and industrial properties across Namibia.

Performance Trend (Year Ended July 2025 vs July 2024)

Revenue: Steady Growth. Up 5.5% to N$2.81 billion.
Profitability: Surged. Profit after tax jumped 56.7% to N$115.1 million.
Driver: This "best year in history" (45th anniversary) was driven by excellent margin management and cost controls, rather than massive top-line expansion. The operating margin expanded significantly.
Balance Sheet: Net Asset Value grew by ~14% to N$7.86/share. The balance sheet is unleveraged and robust.

Sector Context

Macro Factor (Namibian Agriculture): Drought vs. Resilience. Namibia is a semi-arid country prone to severe drought cycles. While recent rains restored hope in late 2025, the sector is perpetually at the mercy of rainfall. Agra acts as a partial hedge: in bad years, farmers sell livestock (boosting auction commissions); in good years, they buy inputs (boosting retail).

Step 4: The Verdict

Bull Case (The Deep Value Play): 50 cents on the Dollar. You are buying a profitable, dominant monopoly (in its niche) for nearly half its tangible book value (Price 413c vs NAV 786c). A P/E of 3.6x is absurdly cheap for a company growing earnings by 50%+. The dividend is growing rapidly, and the business serves a critical, non-discretionary function in the Namibian economy.
Bear Case (The Liquidity Trap): You Can't Get Out. The valuation is low because the money is "trapped." With no major catalyst to unlock value (like a buyout) and thin trading volumes, the share price may languish at this discount forever. Furthermore, as a Namibian pure-play, you are exposed to a single economy and its specific climate risks.
Fair Value Estimate: 600c â 650c
Basis: Even applying a strict 20% discount for illiquidity and country risk to the NAV (786c), the fair value lies well above N$6.00.
Final Rating: SPECULATIVE BUY (Long Term)
Rationale: This is a "coffee can" stockâbuy it, put it away for 5-10 years, and collect the dividends. It offers immense margin of safety through its asset backing, but it is unsuitable for traders or anyone needing short-term access to their capital.