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Pakistan’s cement industry is on track to post a 34% year-on-year profit growth in the first quarter of FY26, driven by higher domestic demand, lower coal prices, and easing finance costs, according to a report by Topline Securities.
After several challenging quarters marked by inflation, energy shortages, and high interest rates, the cement sector is finally witnessing recovery. The government’s renewed focus on infrastructure and housing projects has boosted domestic dispatches, while global coal price declines have reduced production costs.
Topline projects total profitability at Rs. 20.6 billion in 1QFY26, up from Rs. 18.8 billion in 4QFY25. Domestic cement dispatches rose 14% year-on-year, reaching 12.1 million tons, while exports increased 21% YoY despite a slight quarterly dip. Sector utilization improved to 57.5%, with southern manufacturers outperforming the north due to stronger exports.
“Easing finance costs, improved local demand, and stable input prices are creating favorable conditions for the cement industry,” stated Topline Securities in its report.
Falling coal prices averaging US$90 per ton compared to US$110 per ton last year significantly reduced fuel expenses. Many producers also adopted renewable energy sources and alternative fuels to cut costs and enhance margins, which climbed to 36%, up 12.5 percentage points YoY.
Company-Wise Earnings Outlook
| Company | Expected EPS (1QFY26) | YoY Change | Highlights |
| Lucky Cement (LUCK) | Rs. 15.6 | +27% | Strong local & export growth |
| DG Khan Cement (DGKC) | Rs. 5.73 | +211% | Sharp rise in domestic & export sales |
| Maple Leaf Cement (MLCF) | Rs. 2.93 | +129% | Lower finance costs & high demand |
| Fauji Cement (FCCL) | Rs. 1.56 | +18% | Boost from renewable energy use |
| Kohat Cement (KOHC) | Rs. 3.19 | -9% | Margins improved despite earnings dip |
Overall, net sales are expected to grow 10% YoY to Rs. 103 billion, while finance costs are likely to drop 47% YoY, thanks to declining interest rates and improved debt management.
Analysts believe that sustained construction activity, coupled with cost optimization and renewable energy adoption, will continue to strengthen the cement industry’s profitability through FY26.
