Maple Leaf Cement Eyes Growth with Construction Demand Surge and Healthcare Expansion

Lahore: Maple Leaf Cement Factory Limited (MLCF) hosted its fiscal year 2025 analyst briefing, revealing an optimistic outlook for the upcoming year and its strategic expansion into the healthcare sector. Company officials outlined expectations of a 10-13% increase in cement dispatches for FY26, buoyed by strong demand from private sector and construction activities.

In FY25, MLCF reported an average grey cement retention price of Rs16,167 per ton, up from Rs14,887 per ton in FY24. The company currently requires 40.34 megawatt-hours of power, with an average cost of Rs15.82 per kilowatt-hour.

MLCF’s fuel mix comprises 65% petroleum coke, 5% imported coal, and 35% biomass, with a weighted average fuel cost of Rs30,500 per ton. The company anticipates a continued bearish trend in imported coal prices. Additionally, the freight differential between train and truck transport is approximately $12 per ton.

In a significant development, MLCF announced its diversification into healthcare through NovaCare Hospitals. The company plans to establish three facilities in major cities, with the first opening in Islamabad by the end of 2026. This $100 million project is being financed equally through debt and equity, with MLCF holding a 99.99% stake.

MLCF, along with its associate, holds a 40.1% stake in Agritech Limited, while Fauji Fertilizers Company holds approximately 44%. The total investment consideration is Rs8.3 billion, with the current market value estimated at approximately Rs20 billion. MLCF management stated that Agritech’s debt has been restructured, and they expect the company to become a reliable source of cash flow.

The company’s effective tax rate is reported to be among the lowest, with taxation expected to be Rs400-500 million lower than peers due to tax arbitrage on Maple Leaf Power. Regarding a pending royalty hike case, the impact is estimated at approximately Rs80 per bag, with a hearing expected later this month.

MLCF is trading at a projected price-to-earnings ratio of 8.4 for FY25 and 7.0 for FY26. The company remains optimistic about its future performance and strategic ventures.