Lucky Cement is expected to report a 20 percent year-on-year decline in unconsolidated profit for the first quarter of fiscal year 2026-27, as rising coal prices put pressure on margins despite continued growth in sales.
The company’s net sales are projected to increase 16 percent year-on-year to approximately PKR 39.2 billion, supported by an improvement in domestic dispatches. However, weak export volumes and higher production costs are expected to limit the benefit of revenue growth.
Higher Coal Prices Weigh on Cement Margins
Lucky Cement’s cost of sales is estimated to have increased 20 percent year-on-year during the quarter, primarily due to higher imported coal prices.
The faster increase in costs compared with sales is expected to constrain profitability. Gross profit is projected to grow by only 9 percent, indicating continued pressure on the company’s margins.
The trend highlights the challenges facing cement manufacturers as higher input costs limit their ability to convert rising revenues into stronger earnings.
Unconsolidated Profit Expected to Fall to PKR 11.65 Billion
Lucky Cement’s unconsolidated profit after tax is estimated at PKR 11.65 billion for 1QFY27, down 20 percent from the corresponding period last year.
Earnings per share (EPS) are projected at PKR 8.0, compared with PKR 10.0 in the same quarter of the previous fiscal year.
Lower finance costs and a modest increase in other income are expected to provide some support. However, these improvements are unlikely to fully offset higher operating costs and the anticipated impact of taxation or other expenses.
The projected earnings decline suggests that cost management will remain critical to protecting profitability amid volatile commodity prices.
Quarter-on-Quarter Earnings Show Improvement
Despite the expected annual decline, Lucky Cement’s unconsolidated profit is projected to increase approximately 18 percent quarter-on-quarter.
Higher sales and dividend income from Lucky Electric Power are expected to contribute to the sequential improvement. This indicates that earnings performance may differ depending on the comparison period and contributions from associated businesses.
At the consolidated level, the outlook is comparatively stronger. Consolidated EPS is projected at PKR 16.0, slightly higher than the PKR 15.0 recorded a year earlier.
Contributions from subsidiaries are expected to support consolidated earnings, highlighting the importance of Lucky Cement’s broader business portfolio in its overall financial performance.
Cement Demand Recovers Amid Export Challenges
Pakistan’s cement sector has shown signs of a demand revival, supported by budgetary measures and housing-related initiatives. Improving domestic dispatches have provided some support to manufacturers, including Lucky Cement.
However, the industry continues to face pressure from elevated coal prices, which increase production costs and restrict margin expansion.
Export performance remains another challenge. North-based cement exports stayed at zero amid the border situation with Afghanistan, limiting opportunities for manufacturers to benefit from external demand.
The combination of improving domestic demand and persistent cost pressures leaves the sector facing a mixed operating environment as the new fiscal year progresses.
Coal Prices and Domestic Demand to Shape Outlook
Lucky Cement remains a company of interest for some sector analysts because of its operational scale and earnings contributions from subsidiaries. Nevertheless, its near-term profitability remains sensitive to movements in coal prices, domestic cement demand and export conditions.
A sustained improvement in domestic dispatches could support revenue growth, but stronger earnings will also depend on whether input costs moderate sufficiently to improve margins.
For investors, the upcoming quarterly results will provide a clearer indication of how effectively the company is managing cost pressures while benefiting from domestic demand and subsidiary income.