AKD Research has published a report on Lucky Core Industries Limited (LCI), which recently held an analyst briefing to discuss its financial results for FY25 and the company’s future outlook. Here are the key points:
– LCI posted standalone earnings of PKR 11.6 billion (EPS: PKR 25.20) in FY25, compared to PKR 11.1 billion (EPS: PKR 24.12) in the same period last year, representing a 4.5% year-over-year increase. The acquisition of Pfizer’s portfolio primarily drove this growth.
– Segment-wise, Soda Ash revenue declined by 16% year-over-year to PKR 39.8 billion due to an 18% drop in volumes, totaling 452,000 tons. This volume contraction was largely caused by a decrease of 74,000 tons in exports, which was attributed to weaker pricing amid intensified international competition.
– Polyester revenue marginally decreased by 1% year-over-year to PKR 39.7 billion, affected by lower volumes as a result of increased competition from imports. Currently, the company’s energy mix consists of 48% gas, 48% furnace oil, and 4% solar. LCI plans to expand its solar capacity in the future, especially given the higher levies on furnace oil.
– Pharmaceutical revenue surged by 72% year-over-year to PKR 21 billion, largely owing to the inclusion of the Pfizer portfolio, which contributed PKR 7.2 billion post-acquisition in FY25. Notably, the acquisition was finalized in September 2024. The segment comprises 65% non-essential and 35% essential drugs. Furthermore, the segment’s margins ranged from 32% to 35%, which elevated the company’s average gross margin to 38%.
– Revenue from the Chemical & Agri Science segment declined by 2% year-over-year to PKR 13.4 billion due to weak demand, while Animal Health revenue fell by 10% year-over-year to PKR 6.1 billion as a result of lower purchasing power and decreased volumes in silage and vanda (cattle feed).
– LCI currently meets over 95% of its power requirements for Soda Ash production using coal. In the coming month, a new, more efficient boiler is expected to be added that will utilize a biomass mix.
– The company’s 70,000 TPA Dense Ash capacity became operational this year, while an additional 200,000 TPA capacity is in the design phase, with its timeline depending on the revival of local demand. Additionally, a new veterinary medicine facility in Sheikhupura is expected to be commissioned early next year.
– Looking ahead, the management anticipates strong growth in the pharmaceutical segment, along with solid performance from the Polyester segment. However, challenges in the Soda Ash segment are expected to continue until pricing pressures ease.
– The company’s balance sheet remains robust, with minimal debt of PKR 2.3 billion as of June 2025, resulting in a gearing ratio of just 5%.
Courtesy: AKD Research
