KARACHI: The Pakistan cement sector experienced a 12% increase in profitability for the fiscal year 2026, according to a recent review by JS Global. This growth was primarily driven by an 8.5% rise in revenue, which was bolstered by a 10.2% surge in domestic dispatches, as well as improved margins, decreased finance costs, and increased dividend income from subsidiaries.

According to JS Global, the sample of eight companies that accounted for 74% of the sector's market capitalization showed a 23% year-on-year growth in earnings during the fourth quarter of FY26. This was largely attributed to a 10.2% increase in dispatches and tax reversals resulting from a 2% reduction in super tax. Additionally, on a quarter-on-quarter basis, earnings rose by 11% in the fourth quarter, supported by higher market rates per bag, which improved gross margins by 2.6 percentage points, and a reduced effective tax rate.

JS Global has maintained an "Overweight" stance on the cement sector due to healthy margins, a strong domestic demand outlook, and attractive valuations following a recent 10.7% month-on-month correction in stock prices. However, ongoing conflicts in the Middle East present potential risks, as they could lead to increased coal prices and heightened inflation, which may negatively impact demand.