Fauji Cement Sees 51% Surge in Quarterly Earnings Amid Higher Sales

Lahore: Fauji Cement Company Ltd. (FCCL) has reported a significant increase in its financial performance for the second quarter of the fiscal year 2025, with earnings rising by 51% year-over-year. The company’s earnings reached PkR4.0 billion, equivalent to an earnings per share (EPS) of PkR1.64, compared to PkR2.7 billion (EPS: PkR1.08) in the same period last year. This growth is attributed to increased sales and higher other income levels.

According to a statement by AKD Securities Limited, FCCL’s revenue for the quarter rose by 24% year-over-year, reaching PkR24.9 billion, up from PkR20.1 billion in the corresponding period last year. This revenue increase was driven by a 12% year-over-year rise in offtakes and a 5% increase in retention prices.

The company’s gross margins improved to 35.8% from 32.6% in the same period last year. This improvement was largely due to the increase in retention prices and a reduction in power costs, thanks to a decrease in grid tariffs. FCCL relies on the grid for around 40% of its power needs.

In addition to increased sales, FCCL’s other income surged by 2.7 times year-over-year to PkR489 million. This surge was mainly due to an increase in short-term investments, which rose to PkR4.8 billion by the end of September 2024, compared to PkR250 million in the same period last year.

However, the company’s finance costs rose by 31% year-over-year to PkR1.3 billion, primarily due to the finance cost associated with recent expansion efforts. The effective tax rate for the quarter stood at 38%, consistent with the previous quarter but up from 35% in the same period last year.

For the first half of the fiscal year 2025, FCCL’s earnings increased by 38% year-over-year to PkR7.3 billion (EPS: PkR2.96) from PkR5.3 billion (EPS: PkR2.15) in the same period last year. AKD Securities Limited maintains a ‘BUY’ stance on FCCL, citing factors such as market share expansion, an efficient coal and power mix, and easing interest rates as supportive of future earnings growth. The target price set for December 2025 is PkR61 per share.