Kohat Cement Company (KOHC) Looks Undervalued, And That Could Mean Opportunity for Investors

Kohat Cement Company (KOHC) isn’t just cutting costs and expanding its operations; it’s also trading at what many would call a bargain.

Let’s break down why this might be a great time to pay attention to this cement stock, and how it’s planning to unlock even more value from unused assets.

KOHC stock is cheaper than the industry average

Valuation is a fancy way of asking: Is this stock expensive or cheap compared to its performance and assets?

Currently, KOHC is trading at:

• US$33.4 per ton of cement capacity
  vs.
• Industry average of US$59.8/ton
• 10-year average of US$52.7/ton

That means KOHC is trading at a 44% discount to its peers and 37% below its long-term average.

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Another way to look at value is EV/EBITDA (a common profit measure). KOHC trades at 3.2x, while the industry average is 6.9x, again showing the stock is much cheaper than others in the sector.

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In simple terms, KOHC is currently undervalued, but has solid fundamentals and cost-saving strategies in place. That’s often seen as an attractive entry point for long-term investors.

What makes KOHC so strong?

It’s not just the price that makes KOHC appealing. The company has:

• Strong internal cost controls
• Solid cash generation
• A healthy balance sheet
• A stock split was recently announced (which can improve liquidity)
• Growing focus on energy efficiency and renewable power

All of this supports long-term performance, and could mean the current “cheap” price won’t last forever.

Unlocking hidden value through real estate

Here’s something many investors might not even realize:

KOHC owns 1,128 kanals of land in prime areas of Lahore. That’s a huge chunk of real estate.

• Book value of this land: PKR 4.3 billion
• Market value now estimated at: PKR 9.1 billion
• That’s a 111% capital gain, without selling a single plot

Until now, this land has just been sitting there. But not anymore.

KOHC has announced it will launch a new subsidiary called Ultra Properties (Pvt.) Ltd. This company will:

• Lease one of KOHC’s properties
• Build a multi-story commercial building
• Start earning recurring rental income

To get this started, KOHC has approved PKR 750 million in funding for construction and development.

Why does this matter for investors?

This move means KOHC is no longer just a cement company; it’s entering the real estate income business, using assets it already owns. This is smart business, and it could create a brand new cash flow stream for the company.

So now, you have:

✔️ A company cutting costs through smart energy choices
✔️ A cheap stock vs. peers and historical levels
✔️ New revenue streams from valuable real estate
✔️ A strong balance sheet and consistent profits

Kohat Cement is quietly building something impressive, both in its core cement operations and in new income streams through real estate. With the stock trading at a big discount, this could be a rare buy-low, benefit-later situation for long-term investors.

As always, do your research, but don’t ignore KOHC’s potential.

Source: Insight 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 →