Lucky Cement Limited (LUCK) is scheduled to announce its 3QFY21 financial result on 27th Apr’21 whereby we forecast the profitability to clock-in at PKR 3,541mn (EPS: PKR 10.95) compared to PKR 999mn (EPS: PKR 3.09) in SPLY and PKR 2,315mn (EPS: PKR 7.16) in the last quarter. Primary reason behind robust growth in earnings is a massive improvement in margins (expected at 29.7% vs. 11.6% in 3QFY20) led by a 22% jump in company offtake (2,601k tons vis-à-vis 2,125k tons last year) coupled with sharp turnaround in retention prices and soft coal prices.

On a QoQ basis, margins are expected to inch up by 0.52% (2QFY21: 29.2%) as price hike in North tagged with a minor 1% uptick in offtake will offset the impact of higher coal prices. We also highlight that other income is set to undergo a 6x increase QoQ amid recognition of dividend income from ICI (PKR 20/share). This will take the 9MFY21 earnings to PKR 8,082mn (EPS: PKR 24.99), up by 3x YoY against PKR 2,935mn (EPS: PKR 9.08) in SPLY given solid growth in margins (projected at 29.0% vs. 13.9% last year) amid pricing improvement, 31% surge in offtake to 7,598k tons and soft coal prices. That said, we foresee consolidated earnings of LUCK at PKR 20/share in 3QFY21.

Courtesy – AHL Research