Karachi: D.G. Khan Cement (DGKC) announced its financial results for the second quarter of fiscal year 2026, reporting earnings that exceeded market expectations. The company recorded an unconsolidated profit of approximately Rs 3.69 billion, translating to earnings per share (EPS) of Rs 8.43, marking a 71 percent increase from the previous quarter.
According to JS Global, the robust performance in 2QFY26 was driven by higher-than-expected gross margins, which rose to 31.8 percent from 21.7 percent in the previous quarter and 25.1 percent in the same quarter last year. For the first half of FY26, DGKC's earnings rose by 66 percent year-over-year to Rs 5.9 billion, with an EPS of Rs 13.36. The company attributed the margin improvements to reduced coal prices and enhanced operational efficiency.
Net revenue for the quarter increased by 5 percent from the previous quarter to Rs 20.8 billion, compared to Rs 19.8 billion in the same period last year. Domestic cement dispatches were stable year-over-year but grew by 18 percent quarter-over-quarter to 1.02 million tons. However, export dispatches declined by 23 percent year-over-year and 18 percent quarter-over-quarter to 0.39 million tons.
The effective tax rate for 2QFY26 was 34.1 percent, up from 30 percent in the same quarter of FY25. In the first half of FY26, the effective tax rate increased to 35.2 percent from 32.3 percent in the previous year. Meanwhile, the company's finance cost decreased significantly by 71 percent year-over-year and 29 percent quarter-over-quarter to Rs 304 million, largely due to lower interest rates and reduced debt levels.
Despite the positive earnings, DGKC did not declare a cash dividend, aligning with industry expectations. The company is currently trading at a price-to-earnings ratio of 8.0x for FY26E and 7.1x for FY27F.
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