Lucky Cement Profit Jumps 29% as Margins Roar Back in Fourth Quarter

KARACHI: Pakistan's cement makers have spent most of FY26 fighting the same two enemies: weak domestic demand and energy bills that won't sit still. Lucky Cement's fourth-quarter numbers barely acknowledge either problem.

The Karachi-based group closed the quarter with consolidated profit of Rs25.35 billion attributable to equity owners up 29 percent on last year. Earnings per share landed at Rs17.31.

Lucky Cement Profit Rises

The margin numbers are where this result actually gets interesting. Consolidated gross margin came in at 27.1 percent for the quarter, up from 24.2 percent a year earlier and well above the 23.6 percent posted just three months before. Yet for the full year, margins slipped to 25 percent from 27.3 percent in FY25. Those two facts sitting next to each other tell a specific story: Lucky spent most of FY26 absorbing cost pressure before recovering a large share of it in a single quarter.

Also Read: Lucky Cement Extends Dominance as Karachi Plant Adds 300,000 Tons Capacity

Revenue tells a supporting story, not the lead one. Consolidated net revenue rose 19 percent year-on-year and 7 percent from the prior quarter to Rs139.0 billion, taking the full-year total to Rs516.3 billion, up 15 percent. Higher cement dispatches did part of the work; stronger vehicle sales at Lucky Motor Corporation did the rest. That auto business matters more than it might look it's the reason Lucky isn't entirely at the mercy of a construction sector that hasn't been especially generous lately.

Strip away the subsidiaries and associates, and the standalone cement business looks stronger still. Profit after tax grew by 72 percent year-on-year but was down by 27 percent from Q3 to Rs9.89 billion in Q4. Profit for the entire year stood at Rs46.62 billion, which grew by 41 percent on a year-over-year basis when compared to FY25.

There were two accounting factors which directly contributed to this profit figure. First, the finance costs fell by 10 percent year-on-year to Rs4.7 billion for the quarter and were down 26 percent on a year-over-year basis, to Rs18.9 billion from Rs25.4 billion in FY25 due to lower borrowings in the year. The other one was taxation. The company's consolidated effective tax rate was down to 14.5 percent from 20.0 percent and the standalone effective tax rate fell to 23.3 percent from 36.1 percent in FY25.

Also Read: Lucky Cement Profit Climbs 11% to Rs63.68bn in 9MFY26

Not every line item cooperated. Share of profit from associates fell 28 percent year-on-year to Rs3.48 billion in the fourth quarter, even though it climbed 28 percent from the previous one. Full-year associate income came to Rs16.75 billion, down 6 percent from FY25 a reminder that not every part of Lucky's portfolio is firing in sync.

The board declared a dividend of Rs5.0 per share for the quarter. The market had expected exactly that.

Two other announcements rode alongside the results. Lucky Cement will invest Rs1.2 billion in National Resources Limited for a 33 percent stake, extending its reach beyond cement manufacturing. And a 300,000-ton capacity optimization at its Karachi plant has pushed total cement production capacity to 15.6 million tons.

The brokerage behind the estimates maintains its Buy stance on LUCK, which it says trades at an FY27E price-to-earnings ratio of 6.4x. Whether that multiple qualifies as cheap depends on comparisons this dataset doesn't offer LUCK's own valuation history, or how peers in the cement sector are priced right now. What the quarter does establish, on its own terms, is a company that widened its margins, trimmed its financing costs, and used a car business to soften a rough patch in construction demand. The next two quarters will decide whether that combination sticks.