Lucky Cement (LUCK) delivers strong Q2 performance

Key takeaways

• LUCK reported an EPS of Rs24.84 for Q2FY25, reflecting a 7% YoY increase, driven by 24% higher dispatches.
• Gross margins remained stable despite an 86% YoY increase in exports, with South region clinker exports priced at US$30/ton.
• Fuel costs per ton remain the lowest in the industry, following LUCK’s renewable energy investments and operational efficiencies.
• Foreign operations continue to perform well, with 90-95% capacity utilization and a 1.8 million tons expansion in Iraq expected by the end of FY25.
• Stock split announced, increasing total outstanding shares from 293 million to 1.465 billion, improving liquidity and accessibility.

Higher dispatches support revenue growth

Lucky Cement (LUCK) reported a solid Q2FY25 performance, with EPS reaching Rs24.84, a 7% YoY increase. The growth was mainly driven by a 24% increase in overall cement dispatches, showing strong demand despite industry-wide margin pressure.

Export dispatches saw a significant jump of 86% YoY, with clinker exports from the South region priced at US$30/ton. Meanwhile, the combined North and South region average retention price stood at Rs16,000/ton during 1HFY25.

LUCK expects further demand recovery in the coming quarters, supporting sustained revenue growth.

Cost optimization strategy keeps LUCK competitive

LUCK continues to maintain the lowest fuel cost per ton among peers, following its December 2022 expansion and renewable energy investments. The company’s 103.1 MW renewable power capacity contributed 42% to the North’s power mix and 56% to the South’s power mix as of December 2024.

Additionally, coal costs declined by Rs2,000/ton QoQ to Rs37,000/ton in Q2FY25, further supporting cost efficiencies.

Industry-wide cost comparison (fuel cost per bag)

Company	Fuel Cost (Rs/Bag)
Maple Leaf Cement (MLCF)	583
DG Khan Cement (DGKC)	573
Fauji Cement (FCCL)	534
Kohat Cement (KOHC)	532
Bestway Cement (BWCL)	520
Cherat Cement (CHCC)	506
Pioneer Cement (PIOC)	503
Attock Cement (ACPL)	496
Lucky Cement (LUCK)	449

LUCK remains the industry leader in cost efficiency, significantly lower than competitors.

Foreign operations continue strong performance

Lucky Cement’s foreign operations reported 90-95% capacity utilization, highlighting stable international demand. The company is reinvesting cash from high-return foreign projects, further strengthening its global footprint.

The 1.8 million tons per annum expansion in Samawah, Iraq is expected to come online by the end of FY25, adding further production capacity.

Additionally, Lucky Electric Power Company (LEPCL) maintained 100% availability during 1HFY25, while Thar coal supply is expected from next year, reducing electricity generation costs.

Increasing liquidity through stock split

LUCK announced a 5-for-1 stock split, reducing the face value from Rs10 to Rs2 per share. This move increases total outstanding shares from 293 million to 1.465 billion, enhancing liquidity and accessibility.

By avoiding a bonus issue, LUCK prevents tax implications for investors, making this an attractive move for long-term shareholders. The decision will be finalized at the EoGM on March 18, 2025.

LUCK’s financial outlook & valuation

(Rs mn)	FY24	FY25E	FY26F
Sales	115,325	117,025	130,571
YoY Growth	20%	1%	12%
Gross Margin	34%	32%	32%
PAT	28,106	26,375	30,974
YoY Growth	105%	-6%	17%
EPS (Rs)	95.93	90.02	105.71
EPS Consol. (Rs)	223.74	251.08	294.66
DPS (Rs)	15.00	18.00	20.00
P/E (x)	7.72	15.80	13.46
DY	2%	1%	1%

LUCK currently trades at a FY25E P/E of 15.8x, indicating a strong valuation for investors.

LUCK’s Q2FY25 performance reflects its strong position in the cement industry, backed by higher dispatches, cost optimization, and international expansion. With the lowest cost per bag, stable margins, and a stock split increasing liquidity, Lucky Cement remains an attractive long-term investment in Pakistan’s cement sector.

What are the analysts saying?

Here is how different research firms have set their target prices for Dec 2025:

Research firm	LUCK Target Price
AHL	1256
AKD	1965
IGI	1640
JS	1520
Intermarket	1400
Taurus	1523
Foundation	1785
Insight	1395
Pearl	1980
IIS	1438
Darson	1553
Al Habib Capital MarketsAHCML	1623
Spectrum	1670

Source: JS Research, PSX