Cherat Cement Sees Profit Surge Amid Improved Margins

Karachi: Cherat Cement Company Ltd. (CHCC) reported a significant boost in its third-quarter earnings for the fiscal year 2025, surpassing market expectations due to improved gross margins. The company recorded a profit of PkR1.7 billion, marking a 35% increase from the PkR1.2 billion reported in the same period last year.

Despite a 10% decline in revenue to PkR7.8 billion, the company’s earnings performance was bolstered by a substantial improvement in gross margins, which rose to 40.0% from 29.6% in the same period last year. This growth was attributed to lower energy costs, particularly a decrease in coal prices and a shift to cheaper furnace oil.

Operating expenses, however, increased by 9% year-on-year, driven mainly by a 30% rise in administration costs. In contrast, other income saw a sharp rise of 92% to PkR267 million, largely due to a significant increase in short-term investments.

The company also benefited from a 62% reduction in finance costs, which fell to PkR124 million, owing to lower outstanding borrowings and reduced interest rates. Despite an effective tax rate of 39%, up from 36% in the prior year, the overall financial outlook remains positive.

AKD Securities Limited has maintained a ‘BUY’ recommendation for CHCC, with a target price of PkR379 per share by December 2025. This outlook is supported by expected earnings growth and favorable conditions in the KPK region, which are anticipated to drive higher cement prices.