Is MLCF rally over? One analyst thinks so

Key takeaways:

• EPS jumps 86% YoY to Rs. 2.67, beating market estimates
• Revenue rises 4% YoY to Rs. 16.6 billion, driven by higher sales volumes and product mix
• Gross margins expand to 35.5%, supported by higher cement prices and lower coal costs
• Finance costs and taxation charges decline significantly, boosting net profitability

Maple Leaf Cement Factory Ltd. (MLCF) announced impressive consolidated earnings for 3QFY25, posting a net profit of Rs. 2.79 billion (EPS: Rs. 2.67), marking an 86% increase compared to the same quarter last year. These results came ahead of expectations, thanks to strong revenue growth and a more favorable tax environment.

Revenue growth and product mix drive performance

The company’s net sales grew 4% YoY to Rs. 16.63 billion, supported by a 5% increase in offtakes. The revenue beat estimates primarily due to stronger-than-anticipated sales of ‘hdPutty’, a key product in their portfolio.

Margins expand on price gains and lower input costs

MLCF’s gross profit rose 23% YoY to Rs. 5.9 billion, translating to an improved gross margin of 35.5%, up 5.6 percentage points from 29.9% last year. This was largely driven by higher cement prices and lower coal costs, which helped offset rising input costs elsewhere.

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Cost efficiencies lift operating profits

• Distribution and selling expenses dropped sharply by 41% YoY to Rs. 770 million, mainly due to reduced branding and promotional activities.
• Administrative expenses increased by 17% YoY, reflecting business expansion activities.
• Other income declined 51% YoY to Rs. 127 million, mainly impacted by lower interest rates.
• Finance costs were slashed by 44% YoY to Rs. 464 million, supported by lower borrowing rates and a 6% reduction in total outstanding debt.

Taxation benefits amplify bottom line

A key driver of the earnings beat was a lower effective tax rate of 25%, down from 35% in 3QFY24, resulting in a tax charge of Rs. 940 million. This reduction supported the robust 86% YoY growth in net profits.

Nine-month performance and outlook

Cumulatively, Maple Leaf Cement’s earnings for 9MFY25 rose by 46% YoY to Rs. 7.9 billion (EPS: Rs. 7.51), compared to Rs. 5.4 billion in the same period last year.

Despite the strong rally of 77% in the stock price year-to-date, AKD Securities has maintained a ‘Neutral’ rating on MLCF, with a target price of Rs. 71/sh for December 2025, implying a modest 5% upside potential from current levels.

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Source: AKD Securities Limited

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →