Kohat Cement Company Prioritizes Cost Containment Amid Macro Challenges

Karachi, Kohat Cement Company Limited (KOHC) recently held a corporate briefing to discuss its financial results and outlook for FY23 and the first quarter of FY24. Facing ongoing macroeconomic challenges, the company is actively focusing on increasing cost efficiencies to manage demand pressures. This strategic shift includes diversifying coal sources and incorporating more renewable energy, particularly solar power.

According to JS Research, KOHC is intensifying its efforts to adapt to the current economic environment. The company plans to expand its renewable energy initiatives, notably by adding another solar plant. This move is expected to increase solar energy’s contribution to the company’s power mix from the current 4% to 15%. Additionally, the management revealed plans for another tranche of stock buy-back, following the completion of a 5 million share buy-back in August 2023, which represented 8% of the free float. JS Research maintains a Buy rating on KOHC stock, citing the company’s focus on cost optimization and its low-leverage balance sheet. They anticipate a 30% upside to the stock price from its current levels, reflecting confidence in the company’s strategic direction.

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