Kermanshah Petrochemical (Karmasha) Is About to Reopen After Its AGM: a 97% Capital Increase, a 1,227-Rial Dividend, and the Global Urea Shock in the Background (Saturday, July 11, 2026)

Kermanshah Petrochemical Industries, which trades on the Tehran Stock Exchange (TSE) under the symbol Karmasha, is one of the few dedicated producers of urea and ammonia on the exchange, and it is currently a halted stock on the verge of reopening after its annual general meeting (AGM). In its last session before the halt, Wednesday, July 1, 2026 (10 Tir 1405), Karmasha's closing price was 25,070 rials (up 1.87 percent) and its last trade was 25,340 rials (up 2.97 percent). The stock trades at a trailing price-to-earnings (P/E) ratio of about 8.18, roughly in line with the chemicals group average of 8.24, meaning the market prices it neither cheaper nor more expensive than its own peer group.

What makes Karmasha notable right now is not a valuation discount, but a combination of corporate events and a global backdrop. The company has just completed a 97.33 percent capital increase from retained earnings (registered on June 23, 2026 / 2 Tir 1405); at its annual general meeting on July 7, 2026 (16 Tir 1405) it approved a cash dividend of 1,227 rials per share, equal to 40 percent of net profit; and it is now preparing to reopen just as the global urea price starts moving again after the renewed Strait of Hormuz crisis that began on July 7, 2026 (16 Tir 1405). Sahmino had not previously covered this symbol.

Background

Karmasha has a nameplate capacity of about 686,220 tons of urea per year (close to 7 percent of Iran's total urea capacity) and roughly 396,000 tons of ammonia per year. It sources its natural-gas feedstock at a subsidized domestic rate and sells its output both in the domestic market (at a government-set price for agricultural urea) and to export markets such as Iraq, Armenia, Turkey, Kuwait, and Brazil. Its major shareholder is Parsian Oil and Gas Holding (Parsan), with more than 46 percent of the shares, part of the same Parsian urea cluster that also includes Pardis (Shepdis) and Shiraz Petrochemical.

Fiscal year 1403 (ended March 2025) was a hard year: net profit of about 2,054 billion tomans (roughly 20,540 billion rials), down about 44.7 percent year on year, mainly due to low global urea prices, winter gas cutoffs, and higher feedstock costs. The fiscal 1404 picture is better: trailing earnings per share (EPS) now stands at 3,066 rials, and the company distributed 1,227 rials of it at the recent AGM. One important caveat: because of the 97 percent capital increase, which lifted the share count from about 11 billion to more than 20 billion shares, comparing this year's per-share earnings directly with prior years is misleading; the right basis is the trend in total net profit, not the per-share figure, which is mechanically diluted by a capital increase.

Key figures

All figures are dated and refer to the last trading day before the symbol was halted (July 1, 2026 / 10 Tir 1405) or to the relevant global source.

Drivers

Corporate driver: capital increase and dividend

Karmasha's 97.33 percent capital increase from retained earnings was registered on June 23, 2026 (2 Tir 1405), lifting the share count from about 11 billion to nearly 21 billion shares. This kind of capital increase does not create new value by itself, because the per-share price is mechanically and proportionally adjusted downward. The annual general meeting on July 7, 2026 (16 Tir 1405) then approved a cash dividend of 1,227 rials per share (about 40 percent of net profit). The symbol has been halted in the days around the AGM and is now awaiting a reopening with price discovery.

Sectoral driver: the shock and rebound in global urea prices

According to the World Bank, the closure of the Strait of Hormuz, through which nearly a quarter of global urea exports pass, together with the halt of Iran's ammonia output during the war and the suspension of Qatar's urea, ammonia, and sulfur production after damage to key facilities, pushed urea above $850 per ton by April 2026. With the Iran-US ceasefire in Khordad (June) and the gradual reopening of Hormuz, prices fell to less than half that peak, around $400, by early Tir (late June); but the complete collapse of the ceasefire on July 7, 2026, following the attack on three tankers in the Strait of Hormuz and the US revocation of Iran's oil-sales license, has again disrupted shipping traffic (war-risk insurance for a Hormuz transit has reached up to 6 percent of a vessel's value), and granular urea FOB Persian Gulf jumped about 8 percent on July 9 to above $416 per ton, a first sign of a fresh shock rather than necessarily a return to April levels.

Operational driver

Karmasha ran at more than 103 percent of nameplate capacity in Mordad 1404 (August 2025), setting a sales and export record; in the monthly reports for spring 1405 it was also cited as one of the best sales performers in the urea group.

Currency mechanism

Karmasha's main cost, subsidized natural-gas feedstock, is rial-denominated, while its revenue, from dollar exports and domestic sales at the Nima (official secondary-market) rate, is tied to the dollar. With the free-market dollar crossing the 180,000-toman channel in recent weeks, every incremental gain in the global urea price, or further weakening of the rial, flows almost directly into the company's rial profit, the same mechanism seen in other export-oriented TSE names such as the refiners.

Risks

This picture carries several real, Iran-specific risks that should be stated plainly. First, winter gas cutoffs can halt production entirely, a pattern repeated in 1403 and 1404 with more than a hundred days of restrictions. Second, part of the agricultural urea is sold at a government-set price rather than the export rate, which caps profit, and some receivables from government entities may be slow to collect. Third, sanctions and banking friction in collecting dollar export revenue remains in place. Fourth, the symbol is currently halted, and its reopening will occur with price discovery and no daily price-band limit; the direction of that reopening is not known in advance. And fifth, as noted, a capital increase does not create new value and should not be treated as "free profit."

Outlook

In its April 2026 report, the World Bank had forecast that urea prices would rise nearly 60 percent across 2026 before easing in 2027; but that forecast was published before the price drop in Khordad (June) and the renewed crisis in Tir (July), and should be read cautiously, as an estimate rather than a certainty. The key point is that Karmasha, at a P/E of about 8.18, is priced roughly in line with its own group; so this stock's story is not a valuation discount but rather a combination of clear corporate events (the capital increase and dividend) and an uncertain but potentially upward sectoral driver (the rebound in urea prices amid the fresh Hormuz tension). For a better sense of the relative-valuation logic on the Tehran exchange, see our report on Isfahan Refinery's replacement value versus Shapna's market cap. Relative cheapness is no guarantee of return.

What to watch

Three things are worth following in the days ahead: first, the symbol's reopening and price discovery after the AGM, which will show the market's real reaction to the dividend and the capital increase; second, the daily path of global urea prices and the state of shipping through the Strait of Hormuz, in particular whether the July 9 jump continues or proves temporary; and third, Karmasha's monthly production and sales reports for summer 1405, which will show whether the above-100-percent utilization rate of Mordad 1404 is repeated. You can follow live symbol prices and the main index on Sahmino's Tehran Stock Exchange prices page.

Disclaimer

This report is analytical and educational and does not constitute a buy or sell recommendation. All figures are dated and, before any financial decision, should be verified against official, up-to-date sources (including the Codal disclosure system and market-supervisor notices) on the trading day; the price figures in this report are based on the latest data available before the symbol was halted and will change after it reopens.