DGKC profit jumps 71% QoQ in 2QFY26
D.G. Khan Cement posts Rs3.69bn quarterly earnings on stronger margins, lower finance costs, and improved domestic dispatches; no dividend announced.
D.G. Khan Cement Company Limited reported unconsolidated earnings of Rs3.69bn for 2QFY26, up 71% quarter-on-quarter, driven by higher gross margins and sharply lower finance costs.
Earnings per share clocked in at Rs8.43 for the quarter, according to its latest filing to the Pakistan Stock Exchange.
The result exceeded market expectations due to stronger-than-anticipated margins. Gross margins expanded to 31.8% in 2QFY26, compared with 21.7% in the preceding quarter and 25.1% in the same period last year. In the first half of FY26, margins averaged 26.9%, up from 22.8% a year earlier.
Read More: DG Khan Cement Profit Surges 169% in 1QFY26
Analysts attributed the improvement to lower international coal prices and operational efficiencies. Coal remains a key input for cement manufacturing in Pakistan.
Global thermal coal prices have softened over the past year amid easing supply constraints and slower industrial demand in China, reducing cost pressures for local producers.
Net revenue rose 5% quarter-on-quarter to Rs20.8bn in 2QFY26. Revenue was broadly stable year-on-year, reflecting flat domestic demand and weaker export volumes. In 1HFY26, earnings increased 66% year-on-year to Rs5.9bn, translating into earnings per share of Rs13.36.
Domestic dispatches in the second quarter stood at 1.02mn tons, up 18% from the previous quarter but largely unchanged from a year earlier.
Export dispatches fell 23% year-on-year and 18% quarter-on-quarter to 0.39mn tons, reflecting subdued regional demand and freight challenges.
Pakistan’s cement industry has faced volatile demand over the past two years. According to data released by the All Pakistan Cement Manufacturers Association, total cement dispatches declined in FY24 amid higher interest rates and slower construction activity. However, industry volumes have shown signs of stabilization in recent months as borrowing costs ease.
The State Bank of Pakistan cut its policy rate multiple times since late 2024 as inflation moderated from peak levels seen in 2023. Lower benchmark rates have reduced financing costs for leveraged corporates, including cement producers.
DGKC’s finance cost fell 71% year-on-year and 29% quarter-on-quarter to Rs304mn in 2QFY26. The decline reflects both lower interest rates and reduced debt levels on the company’s balance sheet. The effective tax rate rose to 34.1% in the quarter from 30% a year earlier, weighing slightly on net profitability.