Lucky Cement (LUCK) 2QFY25 Earnings Review: Strong Growth in Profitability

Lucky Cement Limited (LUCK) has reported strong financial results for 2QFY25, with earnings per share (EPS) reaching PKR 73.17, reflecting a 22% YoY and 20% QoQ growth. Consolidated net profitability surged to PKR 21.4 billion, compared to PKR 11.8 billion (EPS PKR 40.3) in the same period last year.

This impressive performance has pushed 1HFY25 profitability to PKR 39.3 billion (EPS PKR 134.6), marking an 11% YoY increase from PKR 35.3 billion in 1HFY24.

Standalone earnings were recorded at PKR 24.84 per share, up 7% YoY and 11% QoQ, resulting in 1HFY25 standalone earnings of PKR 47.24 per share, a mild increase of 1% YoY.

Key Drivers of Growth

Strong Sales Performance

• LUCK’s standalone profitability rose 7% YoY in 2QFY25, driven by a 24% increase in total dispatches.
• Domestic dispatches increased by 2% YoY and 17% QoQ, while export dispatches surged by 86% YoY and 26% QoQ, contributing to overall revenue growth.
• The company’s gross margins improved to 35.26%, supported by higher retention prices in Punjab and efficient coal procurement.

Higher Other Income & Operational Efficiency

• LUCK recorded PKR 3.5 billion in other income, up 32% YoY, further boosting profitability.
• Higher other income was fueled by strong dividend income and increased earnings from cash & short-term investments (PKR 39.1 billion as of 1QFY25 vs PKR 32.4 billion in 4QFY24).
• Operational efficiencies and better inventory management also played a key role in margin expansion.

Rising Demand in Foreign Markets

• Share of profit from associates grew by 16% YoY/QoQ, driven by strong demand in Iraq and Congo.
• Higher international cement prices and stable EBITDA margins supported this growth.

Outlook and Future Prospects

Lucky Cement maintains a strong growth trajectory, backed by fundamental factors that support sustained profitability. The company has an ‘Outperform’ rating with a December 2025 target price of PKR 1,785 per share.

Growth Catalysts for 2025

1. Easing inflation could enhance demand and profitability.
2. Expected interest rate reversal, likely to improve financing conditions.
3. Capacity additions in renewable energy (domestic cement operations to benefit from cost efficiencies).
4. Strong demand and higher pricing power in both local and foreign markets.
5. Stable energy prices, reducing input cost pressures.

Final Thoughts

Lucky Cement’s strong revenue growth, improving margins, and operational efficiencies have solidified its position as a leading cement manufacturer in Pakistan. With rising export demand and improved domestic dispatches, the company is well-positioned for continued success in FY25 and beyond. Investors should keep a close eye on macroeconomic trends and commodity price movements, but LUCK remains an attractive investment at current levels.