Cement Exports Surge, Local Demand Declines in Pakistan

Karachi: Cement dispatches in Pakistan for December 2024 reached 4.2 million tons, marking a 2% year-on-year increase, primarily fueled by a significant 49% year-on-year rise in exports. Conversely, domestic demand witnessed a 5% year-on-year decline.

According to AKD Securities Limited, sector profitability is expected to remain robust, with anticipated earnings growth of 11% year-on-year for the fiscal year ending 2025. This growth is expected despite challenges, as declining coal prices are projected to alleviate some cost pressures faced by the industry.

However, local cement offtakes in fiscal year 2025 are projected to decrease by 6% year-on-year, totaling 36 million tons. This decline is attributed to subdued construction activity due to high cement prices, inflation, increased federal excise duty and royalty rates, and reduced public spending. Among the sector’s key players, Lucky Cement Limited (LUCK) and Fauji Cement Company Limited (FCCL) are highlighted as preferred choices, with respective target prices set at PKR 1,965 per share and PKR 61 per share by December 2025.

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