Karachi, September 09, 2022 (PPI-OT): CHCC expects demand pick-up from 2QFY23

Cherat Cement Company limited (CHCC) held its Corporate Briefing session yesterday in which the management has apprised regarding expected pick-up in demand from 2QFY23 as rehabilitation process kicks in with flood affected areas returning to normal.

The company’s greenfield expansion has faced some delays, however the management updated that the plant is expected to come online within 2-2.25 years from the establishment of Letter of Credit as and when approved by SBP. CAPEX estimate for the expansion will likely be revised upward due to the recent sharp rupee devaluation.

We expect rebound in cement sales to reflect at a later stage, the current atmosphere of muted construction sector demand could prevail for some time and cement dispatches in the ongoing quarter could also be slower. However, due to CHCC’s proximity to Afghan border and proactive approach toward cost efficiency measures, it is relatively well-positioned compared to peers.