According to Topline Pakistan Research, Lucky Cement (LUCK) recently held an analyst briefing to discuss its business performance and outlook. Management anticipates 9-10% growth in local cement demand in FY26, driven by an improving macroeconomic environment and increased construction and private-sector activity.
Management stated that the consortium decided not to bid beyond a certain price in the PIA privatization, reflecting a defined risk appetite and capital allocation for investments across different sectors. As a result, excess cash is being retained as a contingency buffer and for potential investment opportunities.
On the foreign operations front, during 1QFY26, the company announced the addition of a 1.3 million tons per annum (MTPA) line in Congo, while a 0.65 MTPA project in Samawah, Iraq, commenced operations in November 2025.
Regarding recent acquisitions in the sector, management views them positively due to potential synergies and increased market competitiveness. Currently, there are no plans for further expansion because of surplus capacity.
The average domestic retention prices for LUCK in 1QFY26 stood at Rs15,200 per ton. The average coal cost is approximately Rs34,000 per ton. Management highlighted that, due to the unavailability of Afghan coal, the fuel mix has shifted to local and international coal, with international coal prices remaining favorable at around US$90-100 per ton.
Management indicated that moving forward, the South plant will rely entirely on imported coal, while the North plant’s fuel mix is expected to shift from Afghan to imported coal. Additionally, management noted that transportation costs for moving coal from the southern region to the northern plant range between Rs8,000 and Rs10,000 per ton.
The company’s power mix is 50% in-house generation, with the remaining 50% sourced from available thermal sources and the grid. The weighted-average electricity cost, including the incentive package, stands at Rs 32.50 per kilowatt-hour (kWh).
LUCK currently relies primarily on imported coal. With SECMC Phase III expected to come online, local coal availability will improve, and management anticipates that Thar coal will be available by 4QFY26.
LUCK is trading at FY26E/FY27 forecasted Price-to-Earnings (PE) ratios of 7.3x/6.2x and a dividend yield of 1% for FY26.
