Lucky Cement profit rises 23% in 1QFY26

Lucky Cement Limited (LUCK) posted a 23% year-on-year increase in consolidated earnings for the first quarter of FY26, with profit rising to Rs21.99 billion (EPS: Rs15.0), in line with market expectations. Sequentially, earnings grew by 12% from the previous quarter.

The cement and industrial conglomerate’s consolidated revenue increased 11% year-on-year and 6% quarter-on-quarter to Rs123.6 billion, mainly driven by higher sales from its domestic cement operations and Lucky Motors, which benefitted from a rebound in auto sector volumes.

Read More: Lucky Cement Profitability up 213% in 4QFY21

Despite cost pressures in the broader economy, Lucky Cement’s gross margin improved to 25.5% in 1QFY26 from 24.2% in 4QFY25, though slightly below 28.4% recorded in 1QFY25. Finance costs declined by 40% year-on-year, supported by lower debt and a softer interest rate environment.

The company’s share of profit from associates, including Lucky Electric Power Company (LEPCL) and ICI Pakistan, rose 27% year-on-year and 11% quarter-on-quarter to Rs5.4 billion. On a standalone basis, earnings surged 2.23 times year-on-year to Rs9.98 per share, primarily due to a 130% increase in other income — largely from a Rs6 billion dividend received from LEPCL during the quarter.

Standalone gross margins strengthened to 39% in 1QFY26, compared to 33% in 1QFY25 and 36% in the preceding quarter. The improvement was driven by an 18% increase in domestic cement dispatches, reduced coal prices, and a greater reliance on renewable energy in production.

Effective tax rates were reported at 25% on a standalone basis and 21.3% on a consolidated basis, compared to 33% and 19.7%, respectively, in the same quarter last year. The company did not announce a cash dividend, consistent with analysts’ expectations.

Analysts at Topline Securities maintained a BUY stance on Lucky Cement, citing strong profitability, low leverage, and solid contribution from subsidiaries and associates. The stock currently trades at attractive valuations of 6.9x FY26E and 5.8x FY27F earnings multiples, supported by stable margins and diversified revenue streams.