Karachi: Cherat Cement Company Limited (CHCC) has reported a 6% year-on-year decline in its earnings per share (EPS) for the fourth quarter of fiscal year 2026, posting an EPS of Rs8.94. The company’s full-year EPS for FY26 was Rs37.34, which fell short of market expectations.

According to JS Global, the decrease in earnings was attributed to lower-than-expected gross margins, despite a Rs109 million one-off income from SIDC and a reduced effective tax rate of 27.5%. The company’s FY26 profits amounted to Rs7.2 billion, reflecting a 16% year-on-year decline.

The gross margin for 4QFY26 decreased to 27.4%, down from 31.0% in the previous quarter and 32.6% in the same quarter last year. The margin contraction was influenced by cost pressures and a one-time line-stoppage cost of approximately Rs200 million. Net revenue for the quarter declined by 9% year-on-year to Rs8.9 billion, though it increased by 13% quarter-on-quarter, driven by higher domestic dispatches.

Other income rose by 13% year-on-year to Rs507 million in the fourth quarter, supported by the one-off income from SIDC. Finance costs decreased significantly, down 26% year-on-year and 22% quarter-on-quarter to Rs63 million, due to lower debt levels.

Additionally, Cherat Cement announced a final cash dividend of Rs4.0 per share for 4QFY26, bringing the total dividend per share for FY26 to Rs5.5. Despite the earnings shortfall, JS Global maintains a Buy stance on CHCC, which is currently trading at a FY27 estimated price-to-earnings ratio of 6.8x.