Thatta Cement Reports Strong Earnings Boosted by Subsidiary Income

Karachi: Thatta Cement Company Ltd (THCCL) presented its financial performance for FY25 and the first quarter of FY26, showcasing a notable increase in earnings per share driven by enhanced income from its power subsidiary. The company reported a standalone EPS of Rs5.13 for FY25 and Rs1.37 for 1QFY26, marking year-over-year increases of 70% and 14%, respectively.

THCCL’s net sales for FY25 remained stable despite a 5% decline in dispatches, as increased retention prices balanced the drop. However, 1QFY26 saw a 15% year-over-year decline in net sales, attributed mainly to a 17% fall in dispatches, though retention prices averaged Rs15,460 per ton.

The company highlighted a 23 percentage point drop in gross margins during 1QFY26, primarily due to elevated margins in the previous year following a one-off royalty charge reversal. THCCL’s production capacity is influenced by its choice of fuel, with output ranging from 1,800 to 2,200 tons per day.

Plans for capacity expansion are currently on hold for 12-14 months. In the meantime, THCCL is focusing on recent ventures, including acquiring a 28% stake in Pakistan Services Ltd (PSEL) and entering the tractor business. PSEL, which operates up to 1,500 rooms, is expected to significantly contribute to THCCL’s financial performance.

THCCL’s power subsidiary, Thatta Power Pvt Ltd, is anticipated to boost standalone profitability through a projected dividend of Rs1.8 billion in FY26, following a Rs600 million dividend already paid in 1QFY26.

In the tractor market, THCCL has imported 150 units from Minsk Tractor Works Ltd and secured an exclusive assembly license, positioning itself as a future competitor to established players like Al-Ghazi Tractors and Millat Tractors. The company aims to leverage its existing assembly line to accommodate the new business with minimal capital expenditure.