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.

📢 Announcement: You can now access our services and similar analyses by opening an account with us via JS Global

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.

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.

📢 Announcement: We're on WhatsApp – Join Us There! 

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.

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 →