KARACHI: Recent tensions along the Pak-Afghan border have led to a 10% drop in the stock price of Kohat Cement Company Limited (KOHC). However, market analysts suggest that the negative impact on the stock has been overestimated. The management of KOHC has responded to the challenges by shifting its coal sourcing from Afghanistan to international markets. Afghan exports account for only 2% of the company's sales.

In light of the border tensions, analysts have revised down KOHC's earnings projections for the financial years 2026 to 2028 by 6% to 16%. This revision is based on the assumption of zero exports in the second quarter of fiscal year 2026, adjustments in imported coal sourcing, and weaker cement prices. The target price for KOHC has been revised to Rs130, a 5% decrease, after rolling forward the target price to December 2026.

Despite these adjustments, KOHC's stock is trading at 7.5 times the forecasted price-to-earnings ratio for fiscal year 2027 and offers a 38% upside to the target price. Analysts have reiterated their "Buy" rating for the stock, suggesting potential growth opportunities.

Additional developments anticipated by the company include the expected commissioning of a 28.5-megawatt coal power plant between the fourth quarter of fiscal year 2026 and the first quarter of fiscal year 2027. The company also plans to expand its solar power capacity from the current 15.4 megawatts to 20 megawatts. There is optimism for a recovery in domestic cement demand and development of commercial land in Lahore, which are seen as positive triggers for the company’s future performance.