{"id":7917,"date":"2025-02-24T21:38:35","date_gmt":"2025-02-24T16:38:35","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=7917"},"modified":"2025-02-24T22:28:14","modified_gmt":"2025-02-24T17:28:14","slug":"lucky-cement-luck-delivers-strong-q2fy25-performance-with-higher-dispatches-and-cost-optimization","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/lucky-cement-luck-delivers-strong-q2fy25-performance-with-higher-dispatches-and-cost-optimization\/","title":{"rendered":"Lucky Cement (LUCK) delivers strong Q2 performance"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Key takeaways<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>LUCK reported an EPS of Rs24.84 for Q2FY25, reflecting a <strong>7% YoY increase<\/strong>, driven by <strong>24% higher dispatches<\/strong>.<\/li>\n\n\n\n<li>Gross margins remained stable despite an 86% YoY increase in exports, with South region clinker exports priced at <strong>US$30\/ton<\/strong>.<\/li>\n\n\n\n<li>Fuel costs per ton remain the lowest in the industry, following LUCK\u2019s renewable energy investments and operational efficiencies.<\/li>\n\n\n\n<li>Foreign operations continue to perform well, with <strong>90-95% capacity utilization<\/strong> and a <strong>1.8 million tons expansion in Iraq<\/strong> expected by the end of FY25.<\/li>\n\n\n\n<li>Stock split announced, increasing total outstanding shares from 293 million to 1.465 billion, improving liquidity and accessibility.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Higher dispatches support revenue growth<\/h2>\n\n\n\n<p>Lucky Cement <a href=\"https:\/\/ksestocks.com\/blog\/tag\/luck\/\" target=\"_blank\" rel=\"noopener\" title=\"LUCK\">(LUCK)<\/a> 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.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>LUCK expects <strong>further demand recovery in the coming quarters<\/strong>, supporting sustained revenue growth.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Cost optimization strategy keeps LUCK competitive<\/h2>\n\n\n\n<p>LUCK continues to maintain the lowest fuel cost per ton among peers, following its December 2022 expansion and renewable energy investments. The company\u2019s 103.1 MW renewable power capacity contributed 42% to the North&#8217;s power mix and 56% to the South\u2019s power mix as of December 2024.<\/p>\n\n\n\n<p>Additionally, <strong>coal costs declined by Rs2,000\/ton QoQ to Rs37,000\/ton in Q2FY25<\/strong>, further supporting cost efficiencies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Industry-wide cost comparison (fuel cost per bag)<\/h3>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><thead><tr><th>Company<\/th><th>Fuel Cost (Rs\/Bag)<\/th><\/tr><\/thead><tbody><tr><td>Maple Leaf Cement (MLCF)<\/td><td>583<\/td><\/tr><tr><td>DG Khan Cement (DGKC)<\/td><td>573<\/td><\/tr><tr><td>Fauji Cement (FCCL)<\/td><td>534<\/td><\/tr><tr><td>Kohat Cement (KOHC)<\/td><td>532<\/td><\/tr><tr><td>Bestway Cement (BWCL)<\/td><td>520<\/td><\/tr><tr><td>Cherat Cement (CHCC)<\/td><td>506<\/td><\/tr><tr><td>Pioneer Cement (PIOC)<\/td><td>503<\/td><\/tr><tr><td>Attock Cement (ACPL)<\/td><td>496<\/td><\/tr><tr><td><strong>Lucky Cement (LUCK)<\/strong><\/td><td><strong>449<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>LUCK remains the <strong>industry leader in cost efficiency<\/strong>, significantly lower than competitors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Foreign operations continue strong performance<\/h2>\n\n\n\n<p>Lucky Cement\u2019s 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.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>Additionally, Lucky Electric Power Company (LEPCL) maintained 100% availability during 1HFY25, while Thar coal supply is expected from next year, reducing electricity generation costs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Increasing liquidity through stock split<\/h2>\n\n\n\n<p>LUCK announced a <strong>5-for-1 stock split<\/strong>, reducing the face value from <strong>Rs10 to Rs2 per share<\/strong>. This move increases total outstanding shares from <strong>293 million to 1.465 billion<\/strong>, enhancing liquidity and accessibility.<\/p>\n\n\n\n<p>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 <strong>EoGM on March 18, 2025<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">LUCK\u2019s financial outlook &amp; valuation<\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><thead><tr><th>(Rs mn)<\/th><th>FY24<\/th><th>FY25E<\/th><th>FY26F<\/th><\/tr><\/thead><tbody><tr><td>Sales<\/td><td>115,325<\/td><td>117,025<\/td><td>130,571<\/td><\/tr><tr><td>YoY Growth<\/td><td>20%<\/td><td>1%<\/td><td>12%<\/td><\/tr><tr><td>Gross Margin<\/td><td>34%<\/td><td>32%<\/td><td>32%<\/td><\/tr><tr><td>PAT<\/td><td>28,106<\/td><td>26,375<\/td><td>30,974<\/td><\/tr><tr><td>YoY Growth<\/td><td>105%<\/td><td>-6%<\/td><td>17%<\/td><\/tr><tr><td>EPS (Rs)<\/td><td>95.93<\/td><td>90.02<\/td><td>105.71<\/td><\/tr><tr><td>EPS Consol. (Rs)<\/td><td>223.74<\/td><td>251.08<\/td><td>294.66<\/td><\/tr><tr><td>DPS (Rs)<\/td><td>15.00<\/td><td>18.00<\/td><td>20.00<\/td><\/tr><tr><td>P\/E (x)<\/td><td>7.72<\/td><td>15.80<\/td><td>13.46<\/td><\/tr><tr><td>DY<\/td><td>2%<\/td><td>1%<\/td><td>1%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>LUCK currently trades at a <strong>FY25E P\/E of 15.8x<\/strong>, indicating a strong valuation for investors.<\/p>\n\n\n\n<p>LUCK\u2019s 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 <strong>an attractive long-term investment in Pakistan\u2019s cement sector<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the analysts saying?<\/h2>\n\n\n\n<p>Here is how different research firms have set their target prices for Dec 2025:<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><thead><tr><th><strong>Research firm<\/strong><\/th><th><strong>LUCK Target Price\u00a0<\/strong><\/th><\/tr><\/thead><tbody><tr><td>AHL<\/td><td>1256<\/td><\/tr><tr><td>AKD<\/td><td>1965<\/td><\/tr><tr><td>IGI<\/td><td>1640<\/td><\/tr><tr><td>JS<\/td><td>1520<\/td><\/tr><tr><td>Intermarket<\/td><td>1400<\/td><\/tr><tr><td>Taurus<\/td><td>1523<\/td><\/tr><tr><td>Foundation<\/td><td>1785<\/td><\/tr><tr><td>Insight<\/td><td>1395<\/td><\/tr><tr><td>Pearl<\/td><td>1980<\/td><\/tr><tr><td>IIS<\/td><td>1438<\/td><\/tr><tr><td>Darson<\/td><td>1553<\/td><\/tr><tr><td>Al Habib Capital MarketsAHCML<\/td><td>1623<\/td><\/tr><tr><td>Spectrum<\/td><td>1670<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Source: JS Research, PSX<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lucky Cement reported a solid Q2FY25 performance, with EPS reaching Rs24.84, a 7% YoY increase. <\/p>\n","protected":false},"author":9252,"featured_media":6838,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,155],"tags":[10],"class_list":["post-7917","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-fundamental-analysis","tag-luck"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/LUCK-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/LUCK-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/LUCK-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/LUCK-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/7917","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\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=7917"}],"version-history":[{"count":0,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/7917\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/6838"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=7917"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=7917"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=7917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}