Pakistan’s cement sector posted a 25 percent year-on-year increase in profitability during the first quarter of FY27, supported by higher dispatches, improved pricing and stronger margins, according to a report released by AL Habib Research.

The research house stated that sector net revenue rose 24 percent to Rs228.2 billion, driven by an 8.5 percent increase in cement dispatches to 10.85 million tons and a 1.1 percent rise in average retail prices to Rs1,543 per bag.

AL Habib Research noted that gross profit climbed 31 percent to Rs72.6 billion, while gross margins improved to 31.8 percent from 30 percent a year earlier, driven by better cost absorption and operational efficiency.

The report highlighted a sharp regional divide in capacity utilization, with southern plants operating at 95.6 percent capacity compared to 53.4 percent in the northern region. It attributed the weaker northern performance to the continued closure of the Pakistan-Afghanistan border (Durand Line), which halted exports to Afghanistan.

Among major producers, Lucky Cement remained the largest contributor to industry earnings, posting a profit of Rs17.1 billion, up 17 percent year-on-year. Fauji Cement, Bestway Cement, Maple Leaf Cement and Pioneer Cement also recorded robust earnings growth during the quarter.

According to AL Habib Research, the sector’s fundamentals remain encouraging, with demand recovery, pricing discipline and margin expansion supporting profitability, although export disruptions and acquisition-related borrowing costs remain key challenges going forward.