Lucky Cement Ltd. (LUCK) has announced that the kiln of the 1.82mn TPA clinker line has been successfully fired. In addition, the company has announced a new grinding line expansion of 0.65mn TPA in Samawah, Iraq.

According to our estimates, the new clinker expansion would contribute around PkR1.8/2.1 per share to consolidated earnings of FY26E/27E, assuming utilization levels of 70%/80% and an exchange rate of PkR289/300/US$, respectively. We have already incorporated this into our base case.

Moreover, the said grinding unit would complement the newly commissioned clinker line and is expected to contribute PkR0.2/sh in FY26E and PkR0.5/sh in FY27E, and increase our target price by PkR2.1/sh. However, we haven’t incorporated this in our base valuations.

Notably, Iraq cement operations contributed PkR7.0/sh in the company’s consolidated earnings for FY24. After the COD of Iraq’s new clinker line, LUCK’s total capacity will increase to 21.5mn TPA (including a 1.7mn TPA grinding unit in Basra).

Outlook:

We have revised our call to ‘Neutral’ given the recent rally in the stock. We believe the impact of gross margins improvement and upside in LEPCL has largely been priced in, following the announcement of the second dividend distribution even before the tariff true-up. We maintain our Dec’25 target price of PkR393/sh, representing a potential upside of 12% and dividend yield of 1% during the same period.

Courtesy-  AKD Research