{"id":13444,"date":"2026-08-22T11:00:00","date_gmt":"2026-08-22T06:00:00","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=13444"},"modified":"2026-08-22T09:35:54","modified_gmt":"2026-08-22T04:35:54","slug":"cherat-cement-company-limited-chcc-fy26-results-review","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/cherat-cement-company-limited-chcc-fy26-results-review\/","title":{"rendered":"Cherat Cement Company Limited (CHCC) FY26 Results Review"},"content":{"rendered":"\n

The report is a 4QFY26 result preview dated August 20, 2026, rather than the company’s actual published earnings statement. Therefore, the figures below are the estimates contained in the attached report and should not be presented as reported results. The report expects CHCC to post 4QFY26 EPS of PKR 10.90, taking full-year FY26 EPS to PKR 39.30.<\/p>\n\n\n\n

How Strong Are CHCC\u2019s Expected FY26 Results?<\/h2>\n\n\n\n

CHCC is expected to report a mixed FY26 performance. Full-year net sales are estimated at PKR 36.46 billion, down 4%<\/strong> from PKR 37.81 billion in FY25. Gross profit is expected to decline 8%<\/strong> to PKR 12.88 billion, while profit before tax is projected at PKR 11.90 billion, down 8%<\/strong> from PKR 12.89 billion. Despite the decline in revenue and profit before tax, the company’s finance costs are expected to fall sharply, while lower leverage and improving liquidity should provide support to earnings.<\/p>\n\n\n\n

PKR Mn<\/th>FY25A<\/th>FY26E<\/th>YoY<\/th><\/tr><\/thead>
Net Sales<\/td>37,811<\/td>36,464<\/td>-4%<\/strong><\/td><\/tr>
Cost of Sales<\/td>23,841<\/td>23,582<\/td>-1%<\/strong><\/td><\/tr>
Gross Profit<\/td>13,970<\/td>12,883<\/td>-8%<\/strong><\/td><\/tr>
Other Expenses<\/td>2,079<\/td>2,294<\/td>10%<\/strong><\/td><\/tr>
Operating Profit<\/td>11,890<\/td>10,589<\/td>-11%<\/strong><\/td><\/tr>
Other Income<\/td>1,588<\/td>1,664<\/td>5%<\/strong><\/td><\/tr>
Finance Cost<\/td>592<\/td>350<\/td>-41%<\/strong><\/td><\/tr>
Profit Before Tax<\/td>12,887<\/td>11,902<\/td>-8%<\/strong><\/td><\/tr>
Net Income \u2013 With DTL<\/td>8,681<\/td>7,634<\/td>-12%<\/strong><\/td><\/tr>
EPS<\/td>PKR 44.68<\/td>PKR 39.30<\/td>-12%<\/strong><\/td><\/tr>
DPS<\/td>PKR 5.50<\/td>PKR 5.50<\/td>0%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The full-year numbers therefore suggest that CHCC<\/a><\/strong>‘s FY26 earnings are likely to remain below FY25 levels, although the quarterly performance is expected to show some improvement.<\/p>\n\n\n\n

What Is Driving The Expected Decline In Full-Year Sales?<\/h2>\n\n\n\n

The report expects FY26 sales to decline 4%<\/strong> to PKR 36.46 billion. The major factor highlighted is the closure of the Afghan border, given CHCC<\/a><\/strong>‘s relatively high exposure to Afghanistan. For 4QFY26, net sales are estimated at PKR 8.87 billion, down 9%<\/strong> year-on-year from PKR 9.74 billion. The report expects total dispatches to decline 18%<\/strong> year-on-year because the reduction in exports is expected to more than offset a 2%<\/strong> increase in domestic dispatches. This makes export performance one of the most important factors affecting CHCC<\/a><\/strong>‘s FY26 results.<\/p>\n\n\n\n

Can Better Margins Offset The Weakness In Volumes?<\/h2>\n\n\n\n

To some extent, yes. Although 4QFY26 sales are expected to decline 9%<\/strong> year-on-year, gross profit is projected to increase 3%<\/strong> to PKR 3.28 billion. The report expects the 4QFY26 gross margin to reach 37%<\/strong>, up four percentage points year-on-year. The improvement is attributed primarily to the presence of low-cost coal inventory and an expected increase of approximately 6%<\/strong> in net retention. As a result, gross profit per ton is expected to rise 27%<\/strong> year-on-year to PKR 6,230 per ton from PKR 4,923 per ton in 4QFY25. This is an important positive element in the expected quarterly results because CHCC<\/a><\/strong> appears likely to generate higher profitability per ton despite weaker overall dispatches.<\/p>\n\n\n\n

Why Is Finance Cost Falling So Sharply?<\/h2>\n\n\n\n

Finance cost is one of the strongest positive developments in the report. For FY26, finance cost is estimated at PKR 350 million, down from PKR 592 million in FY25, representing a decline of 41%<\/strong>. For 4QFY26 alone, finance cost is expected at PKR 72 million, down 16%<\/strong> year-on-year. The report attributes the quarterly decline primarily to a 54%<\/strong> year-on-year reduction in interest-bearing debt, which is expected to fall to PKR 2.5 billion in 4QFY26 from PKR 5.5 billion in the same period last year. The decline in borrowing costs should provide some support to CHCC<\/a><\/strong>‘s bottom line despite pressure on sales.<\/p>\n\n\n\n

Is The Quarterly Profit Expected To Grow Despite Lower Sales?<\/h2>\n\n\n\n

Yes. The report expects 4QFY26 EPS to reach PKR 10.90, up 15%<\/strong> year-on-year from PKR 9.51. This creates an interesting contrast with the full-year numbers. While FY26 EPS is expected to decline 12%<\/strong> to PKR 39.30, 4QFY26 EPS is projected to increase 15%<\/strong> year-on-year. The improvement is expected to come from better gross margins, lower finance costs and the deferred-tax adjustment discussed in the report.<\/p>\n\n\n\n

Is There A One-Off Tax Effect In The Expected Results?<\/h2>\n\n\n\n

Yes, and this is one of the most important abnormal elements in the report. CHCC<\/a><\/strong> is expected to record a one-off deferred tax adjustment following the likely revaluation of deferred tax liabilities at a lower tax rate after the reduction in the super tax rate to 8%<\/strong> in the FY27 budget. The report expects the effective tax rate to decline to 29%<\/strong> in 4QFY26 from 39%<\/strong> in the same quarter last year. This would increase reported earnings. However, when the earnings are normalised using a 39%<\/strong> effective tax rate, 4QFY26 EPS is estimated at PKR 9.38 instead of PKR 10.90. On this basis, normalised EPS would decline 1%<\/strong> year-on-year rather than increase 15%<\/strong>. This is critical because the reported quarterly earnings growth could otherwise give investors an overly positive impression of the underlying performance.<\/p>\n\n\n\n

4QFY26<\/th>Reported\/With DTL<\/th>Without DTL Adjustment<\/th><\/tr><\/thead>
Net Income<\/td>PKR 2,118 Mn<\/td>PKR 1,828 Mn<\/td><\/tr>
EPS<\/td>PKR 10.90<\/td>PKR 9.38<\/td><\/tr>
YoY EPS Growth<\/td>15%<\/strong><\/td>-1%<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

What Happened To Full-Year EPS?<\/h2>\n\n\n\n

Despite the expected improvement in 4QFY26, full-year EPS is estimated to decline 12%<\/strong>, from PKR 44.68 in FY25 to PKR 39.30 in FY26.Without the deferred-tax adjustment, FY26 net income is estimated at PKR 7.26 billion and EPS at PKR 37.78. This compares with FY25 net income of PKR 8.68 billion and EPS of PKR 44.68. Therefore, the underlying full-year earnings decline is greater than the headline EPS figure suggests.<\/p>\n\n\n\n

What Is Happening To CHCC\u2019s Dividend?<\/h2>\n\n\n\n

The report expects CHCC<\/a><\/strong> to declare a final dividend of PKR 4.00 per share for 4QFY26, taking the cumulative FY26 dividend to PKR 5.50 per share. This would keep the full-year DPS unchanged from FY25 at PKR 5.50 despite the expected 12%<\/strong> decline in EPS.<\/p>\n\n\n\n

Dividend<\/th>FY25A<\/th>FY26E<\/th><\/tr><\/thead>
DPS<\/td>PKR 5.50<\/td>PKR 5.50<\/td><\/tr>
Final Dividend<\/td>\u2014<\/td>PKR 4.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The stable expected dividend is therefore a positive element of the FY26 outlook, particularly against the backdrop of lower expected earnings.<\/p>\n\n\n\n

Has CHCC\u2019s Financial Position Improved?<\/h2>\n\n\n\n

The report indicates a significant improvement in CHCC<\/a><\/strong>‘s financial position. Interest-bearing debt is expected to fall substantially, while cash and short-term investments are expected to increase. FY25 closing cash is shown at PKR 673 million, while FY26E closing cash is projected at PKR 869 million. The report’s forecasts show cash rising further to PKR 6.20 billion in FY27. At the same time, net borrowings are expected to decline by PKR 2.97 billion during FY26. The report specifically highlights minimal leverage and ample liquidity as important elements supporting the investment case.<\/p>\n\n\n\n

Is The Quarterly Performance Improving Sequentially?<\/h2>\n\n\n\n

Yes. The report expects 4QFY26 earnings to increase 51%<\/strong> quarter-on-quarter. This is expected to be driven by a 13%<\/strong> QoQ increase in revenue, supported by a 5%<\/strong> increase in dispatches and a 7%<\/strong> improvement in net retention. The presence of low-cost coal inventory is also expected to expand gross margins by six percentage points QoQ. On a normalised basis, using a 39%<\/strong> effective tax rate, earnings are still expected to increase 30%<\/strong> QoQ. This suggests that the company’s quarterly momentum is improving even though the full-year earnings comparison remains negative.<\/p>\n\n\n\n

What Are The Most Important Abnormal Elements In The Report?<\/h2>\n\n\n\n

The biggest abnormal element is the expected deferred-tax adjustment. The lower effective tax rate is expected to lift 4QFY26 EPS to PKR 10.90, but normalised EPS at a 39%<\/strong> tax rate is estimated at only PKR 9.38. The second important element is the sharp reduction in finance costs. FY26 finance costs are expected to decline 41%<\/strong>, while interest-bearing debt is projected to fall 54%<\/strong> year-on-year in 4QFY26. This provides meaningful support to earnings but is not an indication of stronger cement demand. The third issue is the Afghan border closure. The report identifies continued border closure as a key downside risk because of CHCC<\/a><\/strong>‘s exposure to Afghanistan. A prolonged disruption could continue to pressure exports and earnings. The fourth is the divergence between quarterly and full-year earnings. While 4QFY26 EPS is expected to increase 15%<\/strong>, full-year EPS is still projected to decline 12%<\/strong>. This shows that the expected quarterly recovery is not sufficient to reverse the weakness experienced during the earlier part of FY26.<\/p>\n\n\n\n

What Is The Outlook Beyond FY26?<\/h2>\n\n\n\n

The attached estimates point toward a significant recovery after FY26. Net sales are forecast to increase from PKR 36.46 billion in FY26E to PKR 43.32 billion in FY27F, while EPS is projected to rise from PKR 39.30 to PKR 45.92. The report expects EPS to reach PKR 51.74 in FY28, PKR 61.44 in FY29, PKR 71.63 in FY30 and PKR 82.26 in FY31.<\/p>\n\n\n\n

Financial Year<\/th>Sales (PKR Mn)<\/th>EPS (PKR)<\/th>DPS (PKR)<\/th><\/tr><\/thead>
FY25A<\/td>37,811<\/td>44.68<\/td>5.50<\/td><\/tr>
FY26E<\/td>36,464<\/td>39.30<\/td>5.50<\/td><\/tr>
FY27F<\/td>43,315<\/td>45.92<\/td>7.90<\/td><\/tr>
FY28F<\/td>48,639<\/td>51.74<\/td>8.90<\/td><\/tr>
FY29F<\/td>56,219<\/td>61.44<\/td>10.57<\/td><\/tr>
FY30F<\/td>64,399<\/td>71.63<\/td>12.32<\/td><\/tr>
FY31F<\/td>72,964<\/td>82.26<\/td>14.15<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The forecast therefore assumes that the FY26 weakness will be temporary, with earnings returning to growth from FY27 onward.<\/p>\n\n\n\n

What Is The Overall Verdict On CHCC\u2019s Expected FY26 Results?<\/h2>\n\n\n\n

The report points to a mixed FY26 result with improving quarterly momentum<\/strong>. Full-year sales are expected to decline 4%<\/strong>, while EPS<\/strong> is projected to fall 12%<\/strong>. The main pressures are weaker exports, particularly due to the Afghan border closure, and lower overall dispatches. However, the 4QFY26 picture is considerably better. Gross margins are expected to improve, gross profit per ton is projected to increase 27%<\/strong>, finance costs are falling sharply and quarterly EPS<\/strong> is estimated to rise 15%<\/strong> year-on-year. The biggest caveat is the deferred-tax adjustment. The reported 4QFY26 EPS of PKR 10.90 includes the benefit of the lower expected effective tax rate, while normalised EPS<\/strong> is estimated at PKR 9.38 and would actually decline 1%<\/strong> year-on-year. The financial position is another positive. The report highlights declining leverage, lower finance costs and increasing cash balances, while the expected dividend remains unchanged at PKR 5.50 per share for FY26.<\/p>\n\n\n\n

Verdict: Cautiously positive on the quarterly trend, but not on the full-year earnings.<\/strong> The improving margins, lower debt and stronger sequential performance are genuine positives. However, the Afghan-border-related export weakness and the tax-driven boost to reported 4Q EPS<\/strong> mean the headline 15%<\/strong> quarterly earnings growth should not be taken at face value. The more important question is whether CHCC<\/strong><\/a> can convert the expected margin improvement and lower leverage into sustainable earnings growth from FY27 onward.<\/p>\n","protected":false},"excerpt":{"rendered":"

The report is a 4QFY26 result preview dated August 20, 2026, rather than the company’s actual published earnings statement. Therefore, the figures below are the estimates contained in the attached report and should not be presented as reported results. The report expects CHCC to post 4QFY26 EPS of PKR 10.90, taking full-year FY26 EPS to […]<\/p>\n","protected":false},"author":11,"featured_media":6554,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[155,1],"tags":[199],"class_list":["post-13444","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-uncategorized","tag-chcc"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/08\/CHCC-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/08\/CHCC-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/08\/CHCC-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/08\/CHCC-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/13444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=13444"}],"version-history":[{"count":3,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/13444\/revisions"}],"predecessor-version":[{"id":13447,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/13444\/revisions\/13447"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/6554"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=13444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=13444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=13444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}