{"id":9139,"date":"2025-07-05T11:19:00","date_gmt":"2025-07-05T06:19:00","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=9139"},"modified":"2025-08-01T21:10:57","modified_gmt":"2025-08-01T16:10:57","slug":"can-chcc-maintain-margins-as-sales-slide-heres-what-to-expect","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/can-chcc-maintain-margins-as-sales-slide-heres-what-to-expect\/","title":{"rendered":"Can CHCC maintain margins as sales slide? Here&#8217;s what to expect"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Key takeaways:<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Expected PAT of <strong>PKR 1.5 billion<\/strong>, up <strong>22% YoY<\/strong><\/li>\n\n\n\n<li>Gross margin likely to rise to <strong>32%<\/strong> on lower fuel and coal costs<\/li>\n\n\n\n<li><strong>Sales to decline 6% YoY<\/strong> due to weak local and export dispatches<\/li>\n\n\n\n<li>Surge in other income driven by better returns on short-term investments<\/li>\n\n\n\n<li>Coal prices and discount rates provide major cost tailwinds<\/li>\n<\/ul>\n\n\n\n<p>Cherat Cement Company Limited (<strong><a href=\"https:\/\/ksestocks.com\/blog\/tag\/chcc\/\" target=\"_blank\" rel=\"noopener\" title=\"CHCC\">CHCC<\/a><\/strong>) is expected to post a <strong>Profit After Tax (PAT) of PKR 1,512 million<\/strong> for 3QFY25, translating into <strong>earnings per share of PKR 7.78<\/strong>. This marks a solid <strong>22% year-on-year increase<\/strong>, largely attributable to stronger gross margins and disciplined cost control despite a contraction in topline revenue.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Revenue dip overshadowed by cost gains<\/h2>\n\n\n\n<p>CHCC\u2019s sales revenue is projected to clock in at PKR 8.16 billion, representing a <strong>6% decline YoY<\/strong>. This weakness stems primarily from <strong>lower local and export dispatches<\/strong>, which dropped 6% and a staggering 74% YoY, respectively. Export volumes plunged to just 17,733 tons compared to 69,014 tons in the same period last year. Local dispatches also slipped to 488,360 tons.<\/p>\n\n\n\n<p>Yet, despite these volume pressures, the company\u2019s <strong>gross margins are expected to improve to 32%<\/strong>, up from 29.6% in 3QFY24. This margin expansion is a result of lower coal prices, improved operational efficiencies, and continued savings from renewable energy investments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Macro tailwinds offer relief<\/h2>\n\n\n\n<p>Coal prices averaged <strong>USD 95.56\/ton<\/strong> during the quarter, down 0.94% YoY and 15.57% QoQ, offering a welcome relief to the cost of goods sold. Meanwhile, the <strong>discount rate averaged 12%<\/strong>, sharply lower than <strong>22% in 3QFY24<\/strong>, translating into lower finance costs and improved bottom-line performance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Strong other income supports earnings<\/h2>\n\n\n\n<p>CHCC\u2019s <strong>other income is expected to rise more than 3.5x YoY<\/strong>, reaching PKR 628 million, largely due to higher returns on a growing pool of short-term investments (PKR 15 billion) and cash balances (PKR 513 million). This additional income stream plays a vital role in cushioning the impact of falling dispatches.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Robust 9MFY25 outlook<\/h2>\n\n\n\n<p>For 9MFY25, the company is expected to report <strong>EPS of PKR 34.28<\/strong>, up <strong>43% YoY<\/strong>, showcasing the strength of its operational and financial execution even in a tough macro backdrop.<\/p>\n\n\n\n<p><strong>Source: Al Habib Capital Markets (Pvt) Ltd.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cherat Cement Company Limited (CHCC) is expected to post a Profit After Tax (PAT) of PKR 1,512 million for 3QFY25, translating into earnings per share of PKR 7.78. This marks a solid 22% year-on-year increase, largely attributable to stronger gross margins and disciplined cost control despite a contraction in topline revenue.<\/p>\n","protected":false},"author":9252,"featured_media":6554,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,138],"tags":[199],"class_list":["post-9139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-financials","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\/9139","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=9139"}],"version-history":[{"count":1,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9139\/revisions"}],"predecessor-version":[{"id":10792,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/9139\/revisions\/10792"}],"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=9139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=9139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=9139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}