FCCL and KOHC Anticipate Robust Earnings Growth in 3QFY25

KARACHI: Investors in Fauji Cement Company Ltd (FCCL) and Kohat Cement Company Ltd (KOHC) can expect robust earnings growth in the third quarter of fiscal year 2025, according to projections released by JS Global.

FCCL is projected to achieve earnings of Rs1.02 per share, marking a 41% year-over-year increase. Meanwhile, KOHC is expected to report earnings of Rs12.89 per share, reflecting a 23% rise compared to the same period last year.

The anticipated growth for both companies is attributed to improved gross margins. FCCL’s gross margins are expected to increase by 3.3 percentage points, while KOHC’s are projected to rise by 8.5 percentage points. This improvement is driven by higher retention prices and reduced coal costs during the third quarter of fiscal year 2025.

However, the cement industry faces potential challenges with a proposed increase in limestone royalty rates in Khyber Pakhtunkhwa (KPK), aligning them with rates in Punjab. This change could pose a negative impact on both FCCL and KOHC.

Despite this, a reduction in power tariffs might offer some relief. Both companies heavily depend on the national grid for electricity, and lower tariffs could help offset the impact of increased royalty rates.

These projections provide a glimpse into the financial health of the cement sector amid fluctuating costs and regulatory changes.