Lucky Cement posts strong 3QFY25 results—what’s driving the rally?

Key takeaways:

• Standalone EPS jumps to Rs. 9.2, up from Rs. 3.4 last year (↑174% YoY)
• Surprise dividends from LEPCL and LMC boost other income to Rs. 11 billion
• Exports grow 45%, driving a 10% YoY increase in revenue

Lucky Cement Ltd. (LUCK) posted strong standalone earnings of Rs. 13.5 billion (EPS: Rs. 9.2) in 3QFY25—an impressive 2.7x jump compared to the same period last year. The surprise upside was mainly driven by unexpected dividends from Lucky Electric Power Company Ltd. (LEPCL) and Lucky Motor Corporation (LMC).

On a consolidated basis, net profit increased by 15% YoY to Rs. 17.9 billion, supported by better performance from LMC.

Revenue and margins show healthy improvement

Revenue grew by 10% YoY to Rs. 30.2 billion, thanks to a 45% YoY surge in exports (0.74mn tons vs. 0.51mn tons). Gross margins also improved to 33.2% (vs. 28.8% last year), benefiting from lower coal prices and a greater share of low-cost renewable energy in the power mix.

Operating and financial highlights

• Operating expenses increased by 9% YoY to Rs. 2.7 billion, mainly due to higher export volumes.
• Other income surged nearly 4x YoY to Rs. 11.0 billion, fueled by dividend income of Rs. 6.0 billion from LEPCL and Rs. 1.3 billion from LMC—both absent in the same quarter last year.
• Finance cost declined by 26% YoY to Rs. 287 million, reflecting the impact of lower interest rates.
• The effective tax rate fell to 22%, from 31% in 3QFY24, due to tax-exempt dividend income from LEPCL.

Valuation and outlook

While Lucky’s fundamentals remain solid, the stock has already rallied 93% during FYTD. As a result, the rating has been revised to ‘Neutral’, though the target price of Rs. 393/share by Dec’25 still implies a 12% upside.

Source: AKD Securities Limited