LUCK announces capacity expansion in DR Congo

Lucky Cement Ltd. (LUCK) has announced capacity expansion at its JV company of ‘Nyumba Ya Abika’ (LUCK shareholding: 50%), in the Democratic Republic of Congo. The project entails adding 1.6 million TPA to a fully integrated cement line, bringing total cement capacity to 2.91 million TPA (present capacity: 1.3 million TPA), according to a report by AKD Research.

As per our estimates, the new integrated line would contribute around PkR1.7/4.4 per share in consolidated earnings of FY28E/29E, assuming commissioning by mid FY28, utilisation levels of 70%/85% and an exchange rate of PkR308/319/US$, respectively. We have not yet incorporated this expansion in our base case.

To highlight, DR Congo operations contributed PkR3.7/4.6 per share in the company’s consolidated earnings for FY23/FY24, respectively.

Outlook: We have a ‘BUY’ stance on the stock with Jun’26 SOTP target price of PkR558.6/sh. Our liking for LUCK stems from: i) improvement in core margins, ii) increase in dividend from power segment, and iii) expected recovery in cyclical segments benefiting its subsidiaries.

https://research.akdsl.com/639002070681212029.pdf

AKD Research