What to expect from LUCK’s earnings?

For Lucky Cement Limited (LUCK), a 66% YoY earnings increase is not just a figure—it’s possibly a reality for 4QFY24. 

The question arises: what is driving this robust growth, and what does it mean for investors?

Breaking down the numbers

Lucky Cement is expected to announce its standalone earnings of PKR 4.3 billion (EPS: PKR 14.7) for 4QFY24, up from PKR 2.6 billion (EPS: PKR 8.9) in the same quarter last year. 

This impressive rise is primarily fueled by a 13% YoY increase in the company’s topline, which is projected to reach PKR 28.9 billion.

So, what’s contributing to this topline growth despite a 12% YoY decline in local offtakes? The answer lies in a 10% annual increase in average cement prices and a staggering 2.4x YoY growth in exports. 

However, it’s not all smooth sailing. Operating expenses have also surged by 60% YoY due to higher transportation charges—a factor that could weigh on future profitability.

Gross margins and what they mean for Investors

Gross margins are expected to show modest improvement, reflecting the company’s ability to manage costs effectively despite the challenging environment. 

The consolidated earnings paint an even brighter picture, with EPS expected to hit PKR 53.2, up from PKR 40.3 in the previous year.

With these numbers, Lucky Cement is showing that it can thrive even when the local market shows weakness. 

Investors should also note the expected final dividend of PKR 24 per share—a signal of the company’s confidence in its financial stability.

Insight into future prospects

Looking ahead, Lucky Cement continues to be a strong contender in the market, supported by a strategic focus on both local and international markets. 

The company’s stock is poised for a ‘Buy’ rating, with a target price of PKR 1,172 per share by June 2025.

But here’s the million-dollar question: Can Lucky Cement sustain this momentum? 

While the financials are impressive, the company will need to navigate rising costs and potential market volatility to keep investors happy.