Karachi: Lucky Cement conducted an analyst briefing to discuss its latest business performance and future outlook. The management projected an 8-9% growth in local cement demand by the fiscal year 2026, driven by an improving macroeconomic environment and increased construction and private sector activities.
According to JS Global, Lucky Cement is expanding its solar capacity at its Karachi facility with an additional 15MW solar plant, expected to be completed by the fourth quarter of the fiscal year 2026, at an estimated cost of Rs1.2 billion. The company's power generation is predominantly renewable, with 56% sourced in-house, including waste heat recovery, solar, and wind energy. The company is also reviewing a recent tariff reduction but expects no significant impact due to its reliance on renewable energy sources.
The briefing highlighted the company's strategic focus on operational efficiency through the expansion of UC3.0 technology at its Karachi plant, with an estimated cost of Rs3.5 billion and a projected payback period of five to seven years. Management expressed optimism about a recent sector acquisition, citing potential synergies and increased market competitiveness.
Current domestic retention prices for the company are Rs15.4k per ton, with expectations for price stability and gradual recovery in the North region, influenced by inflationary pressures. On the export front, the company experienced a 16.5% year-on-year decline in exports for the first half of the fiscal year 2026 due to the closure of the Afghanistan border, affecting volumes by approximately 100,000 tons. Export prices for clinker and bagged cement are reported at US$33-34 and US$45-46 per ton, respectively.
The company's coal costs have increased to Rs34k per ton, with a shift to imported coal due to the unavailability of Afghan coal, incurring additional freight costs at the North plant. Lucky Cement is currently trading at a price-to-earnings ratio of 7.1 for fiscal year 2026E and 6.0 for 2027F.
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