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DATA AS OF 13 JUL 2026 · EOD

LUCK

Lucky Cement
CEMENT

LAST · PKR

459.46
−9.12 ▼ −1.95%
P/E 8.1× · YIELD 0.9% · ROE 22.1%

52W RANGE

342.91512.70
69% OF RANGE · YTD −4.5%
01 / LUCK — 1 YearAS OF 13 JUL 2026 · EOD
PERIOD 1Y · 250 SESSIONS▲
The Call
BUY+13%
520.00PKR · 12-MO
8.5× FY26E

Margins stabilise and the >50Mt year lands.

Risks to our view
02 /

FAS DESK · FIRST ASIA SECURITIES RESEARCH · 11 JUN 2026 · EOD

Paying a cement multiple for a conglomerate grind

  1. 01

    Buy, PKR 520 target: at 7.1× our FY26E EPS of PKR 61.0, LUCK is priced as a cement cyclical while attributable EPS compounds double digits — +13.3% y/y in 1HFY26 to PKR 30.45.

  2. 02

    Five engines — grey cement, export clinker, the 660MW Lucky Electric plant, Lucky Motor and Lucky Core Industries — delivered FY25 consolidated net profit of PKR 77.0bn on revenue of PKR 449.6bn.

  3. 03

    The sector tailwind is the strongest in five years: 11MFY26 dispatches +6.4% to 46.3Mt, domestic +8.3% to 38.0Mt, with FY26 tracking above 50Mt for the first time since FY21.

  4. 04

    The FY26 tension is cost: 1H COGS rose +15.5% against gross revenue +11.1%, taking gross profit −3.3%; our base case assumes pricing discipline holds while fuel normalises.

Where we differ from the street
Street viewOur viewWe change our mind if
May-26 sales fell 21% y/y — the recovery is stalling.One month against an 11-month trend: domestic is +8.3% over 11MFY26, the FY is tracking >50Mt and 1QFY26 ran +16.3%. Pre-budget May pauses are seasonal.Two consecutive post-budget months of double-digit domestic decline, or north-region prices breaking >5%.
1H gross-margin compression (−3.3% on COGS +15.5%) is a down-cycle signature.The below-the-line response — distribution −11.3%, PAT still +10.4% — shows operational defence; sector profits were +34% in 1QFY26 and +7% in 3QFY26.4QFY26 gross margin failing to stabilise sequentially while pricing holds.
Auto, chemicals and power deserve a holdco discount.The mix lowered earnings volatility — LCI operating +16%, pharma +80% offsetting cement's squeeze; five engines rarely trough together, so it should re-rate toward the market multiple.Capital allocation into sub-scale verticals, or auto rolling over while cement margins are compressed.

— FIRST ASIA SECURITIES RESEARCH · NOT INVESTMENT ADVICE

LUCK · First Asia Securities