Power Cement Limited (POWER) - June 2023

Power Cement Limited (POWER) – June 2023

Research Team

Table of Contents

Corporate Briefing Notes

Power Cement Limited (POWER) held its corporate briefing session today to discuss the financial results for 9MFY23 and to highlight its future roadmap.

Key Highlights

● To recall, net revenue of the company clocked in at PKR21.5bn in 9MFY23, up by 61% YoY, against PKR13.4mn in SPLY. Similarly, EPS of the company reported at PKR 0.26/sh in 9MFY23 compared to LPS of PKR0.15/sh during the SPLY.
● The higher retention prices and improved export sales along with an efficient coal-mix and better plant efficiencies led to massive increase into company’s profitability.
● The management highlighted that, the company witnessed 18% increase in exports dispatches (0.6mn tons) against a 2% decline in local dispatches (1.2mn tons) during 9MFY23. The overall capacity utilization also increased by 68% in 9MFY23 as compared to 60% during the SPLY.
● Sales mix of POWER comprised of institutions (41%) followed by Karachi (33%) and outstation (26%), respectively.
● Company also signed a MoU with ICD to support alternate Fuel Program on May 21, 2023, helping the company to reduce the dependence on coal and increase the use of waste and biomass fuel.
● The company continuously focuses on cost reduction measuress as, local coal share was increased to 50% due to high cost of imports which constitutes 50-70% of total coal consumption during the noted period. Moreover, FX losses are offset by exports due to higher margins.
● The company fulfils around 35% of their total requirement through WHR and the rest through grid. Whereas, the average Grid rate for the 9MFY23 was at around PKR27-28/KWH.

Future Outlook

● Going-forward, the company expects a decline in inflation and interest rates, positioning the company to benefit from an upswing in local cement demand. Furthermore, the company is strategically exploring new markets in Zanzibar, Seychelles, and Madagascar to expand its cement exports.

Important Disclosures


This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.

Analyst certification:

The research analyst for this report certifies that 1.all of the views expressed in this report accurately reflect her personal views about the subject and 2.no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this report.

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