These 5 Could Soar in FY26 according to Arif Habib Limited

3. Fauji Cement Company Ltd (FCCL)

Fauji Cement is emerging as one of the most operationally efficient players in Pakistan’s cement industry. With investments in alternative energy, lower input costs, and a growing focus on backward integration, FCCL is well positioned to deliver record earnings in FY26.

Recent Performance

FCCL is projected to report earnings of PKR 6.6 per share in FY26, the highest in its history. This earnings growth is supported by volume expansion, ongoing cost-saving initiatives, and a significant reduction in finance costs.

One of the biggest drivers of margin improvement is energy efficiency. The company has expanded its solar power capacity to 67.5 MW, helping reduce average power costs by 22 percent in 9MFY25. On the fuel side, FCCL’s strategic shift toward 59 percent local coal and 10 percent alternative fuels has cut fuel costs by 16 percent, significantly boosting profitability.

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Looking ahead, FCCL is planning to invest PKR 1.0 billion in a polypropylene (PP) bag plant to localize up to 90 percent of its packaging, further reducing reliance on external suppliers and tightening cost control.

Gross margins are expected to expand to 34.4 percent in FY26, while the company maintains a healthy balance sheet and reinvests for operational efficiency.

Price Target and Return Potential

Arif Habib Limited assigns a June 2026 target price of PKR 66 for FCCL, offering a total return of 47.1 percent from current levels. This includes an expected dividend payout of PKR 2 per share, translating to a yield of 4.36 percent. For investors looking for growth driven by cost efficiency and smart capital allocation, FCCL offers a strong case heading into FY26.

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⚠️ 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 →