Karachi: Lucky Cement held a corporate briefing to discuss its business performance and future outlook, highlighting a projected 9-10% growth in local cement demand for the fiscal year 2026. The company attributed this expected growth to an improving macroeconomic environment and increased construction and private sector activities.
During the briefing, management addressed the company's decision not to exceed a certain price in the Pakistan International Airlines (PIA) privatization bid. This decision reflects Lucky Cement's defined risk appetite and capital allocation strategy, which includes retaining excess cash as a contingency buffer and for potential investment opportunities.
On the international front, Lucky Cement announced the addition of a 1.3 million tons per annum (MTPA) production line in Congo. Additionally, a 0.65 MTPA project in Samawah, Iraq, began operations in November 2025. Management views recent acquisitions in the sector positively, expecting synergies and increased market competitiveness but noted no immediate plans for further expansion due to existing surplus capacity.
The company's domestic retention prices averaged Rs 15,200 per ton in the first quarter of fiscal year 2026. With the unavailability of Afghan coal, the company has shifted its fuel mix to local and international coal, benefiting from favorable international coal prices between US$90-100 per ton. The South plant will continue to rely entirely on imported coal, while the North plant's fuel mix is expected to transition from Afghan to imported coal. Transportation costs from the southern region to the northern plant range between Rs 8,000-10,000 per ton.
Lucky Cement's power mix is evenly split between in-house power generation and external thermal sources and the grid, with a weighted average electricity cost of Rs 32.5 per kilowatt-hour, including an incentive package. The company, currently reliant on imported coal, anticipates improved local coal availability with the completion of SECMC Phase III and expects Thar coal to be accessible by the fourth quarter of fiscal year 2026.
Lucky Cement is trading at a projected price-to-earnings ratio of 7.3 for fiscal year 2026 and a dividend yield of 1%. Management remains focused on strategic growth and operational efficiency as it navigates the evolving market landscape.