Can CHCC deliver 155% Profit Growth in Q4FY25?

Cherat Cement (CHCC) is on track to report strong earnings growth in the fourth quarter of FY25. The company is expected to post a profit of Rs2.2 billion, translating to an EPS (Earnings Per Share) of Rs11.2, a 155% increase from the same quarter last year.

So, what’s driving this big jump in earnings?

Key Reasons Behind CHCC’s Profit Growth:

1. Tax Relief Boosted Profits:
   Last year, CHCC faced a higher tax burden, which pulled down profits. With that pressure off, this year’s numbers look much stronger.
2. Better Margins from Higher Cement Prices:
   Gross margins, which show how much profit CHCC makes after subtracting the cost to produce cement, are expected to rise to 37%, up 9 percentage points from last year.
   CHCC smartly increased cement prices in line with Punjab, even though it doesn’t face royalty charges in KPK, where it’s based. This helped boost profits without extra costs.
3. Quarter-on-Quarter Performance:
   Compared to the previous quarter, CHCC’s profit is expected to increase by 29%, showing solid ongoing momentum.
4. Dividend Expected:
   CHCC is also expected to reward shareholders with a Rs8 per share dividend in this quarter.

Earnings Snapshot (per share):

CHCC’s strong pricing strategy and favorable tax comparisons have led to impressive profit growth. With better margins, a dividend on the way, and positive quarterly momentum, CHCC looks well-positioned as a cement sector outperformer.

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Source: Sherman Securities

⚠️ 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 →