Karachi: The cement industry in Pakistan has reported a 12% year-on-year increase in profitability for the fiscal year 2026, bolstered by an 8.5% rise in revenue as domestic dispatches increased by 10.2%. These gains were further aided by favorable margins, reduced finance costs, and increased dividend income from subsidiary companies.

According to JS Global, a sample group of eight companies representing 74% of the sector's market capitalization showed a 23% growth in earnings during the fourth quarter of FY26. This growth was largely attributed to a 10.2% increase in dispatches and tax reversals following a reduction in the super tax rate by 2%. On a quarter-on-quarter basis, earnings increased by 11% in the fourth quarter, driven by higher market retail prices, leading to an improvement in gross margins and a lower effective tax rate.

The report maintains an Overweight stance on the cement sector, citing healthy margins, a robust domestic demand outlook, and attractive valuations owing to a recent significant correction in stock prices. However, it also highlights potential risks, including the impact of a prolonged conflict in the Middle East, which could lead to higher coal prices and increased domestic inflation, potentially affecting demand.