Pakistan cement sector earnings surge 55% in FY26's first quarter to PKR 37.5B

Pakistan’s listed cement producers posted a strong start to fiscal year 2026, with combined earnings rising 55% year-over-year (YoY) and 20% quarter-over-quarter (QoQ) to PKR 37.5 billion, according to industry data compiled by Topline Research.

The sector’s performance was driven largely by increased dispatches and lower fuel costs, though profitability gains were uneven across major players.

Net sales for the cement sector reached PKR 181.7 billion in the first quarter of FY26, up 15% YoY and 6% QoQ. Revenue growth was primarily fueled by higher domestic and export dispatches.

However, excluding Lucky Cement Ltd. (LUCK), the sector’s profitability actually declined 10% QoQ to PKR 23 billion, indicating that LUCK’s strong earnings significantly lifted overall sector results.

Production and pricing trends

Domestic cement dispatches rose 14% YoY and 3% QoQ to 9.6 million tons during the quarter, while export volumes increased 21% YoY but fell 3% QoQ to 2.6 million tons.

Average retail cement prices in the northern region dipped 2% QoQ to PKR 1,382 per bag, while prices in the southern region climbed 3% to PKR 1,449 per bag.

The mixed pricing trends reflected regional supply-demand variations and differences in coal sourcing.

Sector-wide gross margins stood at 31% in 1QFY26, slightly higher than 30% in the same period last year but down from 34% in the previous quarter, mainly due to declining retail prices. Despite this, lower coal costs helped sustain profitability.

Cost and margin dynamics

Cement manufacturers in southern Pakistan continued to rely on imported coal from Richards Bay, South Africa, while northern players used a mix of Afghan and local coal. Richards Bay coal prices averaged $90 per ton, down 18% YoY and 1% QoQ.

The sector’s EBITDA reached PKR 56 billion, up 17% YoY but 2% lower QoQ. The EBITDA margin stood at 31%, compared with 29.4% a year earlier and 32.8% in the previous quarter.

Finance costs dropped sharply—down 49% YoY and 14% QoQ to PKR 4.5 billion—following monetary easing that allowed companies to reduce debt.

Company highlights

Lucky Cement remained the sector’s top performer, accounting for 39% of total profits. The company’s net income surged 2.2 times YoY to PKR 14.6 billion and 2.5 times QoQ, driven by a 130% jump in other income—mainly from a PKR 6 billion dividend from its subsidiary, Lucky Electric Power Company—and a 35% YoY rise in gross profit. LUCK’s gross margin reached 39%, the highest in the sector.

Bestway Cement Ltd. (BWCL) contributed 15% of total sector profits, earning PKR 5.5 billion in 1QFY26, up 35% YoY on the back of a 43% drop in finance costs and a twofold increase in associate income. However, BWCL’s profits fell 13% QoQ due to an 18% decline in gross profit.

Fauji Cement Company Ltd. (FCCL) accounted for 9% of sector profitability, reporting earnings of PKR 3.3 billion, down 1% YoY and 16% QoQ.

The decline was linked to lower gross profit and reduced other income. FCCL’s gross margins slipped to 31.5% from 34% last year amid lower northern region prices.

Collectively, LUCK, BWCL, and FCCL contributed 62% of the sector’s total profit in the first quarter.

Analysts expect profitability momentum to continue into the second quarter of FY26, supported by stronger domestic and export demand, lower coal costs, and reduced financing expenses.