Fauji Cement Company Limited (FCCL) reported earnings per share of PKR 5.43 for FY25, compared to earnings per share of PKR 3.35 in FY24. Furthermore, in 4QFY25, the company reported earnings per share of PKR 1.60, compared to earnings per share of PKR 0.48 in the same period last year (SPLY).
Management highlighted that capacity utilization, which stood at 51% post-expansion, is expected to improve to 55–65% over the next two to three years as demand strengthens. According to management, grid power tariffs have eased to ~PKR 31/unit from ~PKR 33, providing cost relief. Local coal currently represents ~75% of the fuel mix, with a utilization target of 80–85% as supply chains normalize.
At present, alternate fuels contribute ~5–7% of the mix, while indicative fuel prices are PKR 36–37k/ton for local coal and PKR 38 39k/ton for Afghan coal. On the packaging side, vertical integration is yielding benefits, with polypropylene bags now largely produced in-house, generating savings of ~PKR 4 per bag compared to market procurement. On the pricing and market front, local net retention stands at PKR 15–16k/ton, whereas export retention is at PKR 10.5k/ton.
Afghan exports remain firm, and management is actively seeking to establish a sea-export channel from the DG Khan plant, though competition from southern players remains a challenge. In the near term, export opportunities could include clinker shipments to Sri Lanka and Bangladesh.
On the regulatory side, the increase in royalty from PKR 250/ton to PKR 1,200/ton remains under litigation. FCCL has secured a Supreme Court stay order on the matter and is confident of a favorable resolution. Looking ahead to FY26, management anticipates domestic cement demand growth of 4–5%. Together with Afghan exports, FCCL targets an 8–9% YoY increase in overall volumes, and expects to outperform industry growth by 1–2%. The September floods led to a temporary slowdown in Punjab during the first half of the month, but as water levels recede, management expects any weakness in the first quarter to be compensated by a recovery in demand during the second quarter.
Important Disclosures
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