D.G. Khan Cement Company Limited (DGKC) may announce capacity expansion soon to the tune of 2.8Mn tons with an estimated cost of PKR 36Bn in Pakistan.

After incorporating the latest price assumption (11% increase since FYTD) and latest accounts, we revise up our earnings estimates for FY21/22 to PKR 6.2/15.7 per share and target price to PKR 165 per share.

Moreover, like other cement players, DGKC may announce capacity expansion soon to the tune of 2.8Mn tons with an estimated cost of PKR 36Bn which may increase our target price further. In addition, the company’s ability to capitalize on exports demand along with the presence in both North and South region are the key factors that warrants a BUY call for the company with Dec’21 target price of PKR 165/sh, offering an upside of 30% from the last close.

Courtesy – BMA Capital Management Ltd.