Pakistan’s listed cement sector recorded a recovery in financial performance during fiscal year 2026, with combined net profit increasing 13% year-on-year to Rs143.19 billion from Rs126.49 billion in the previous fiscal year. The performance reflects a transition from stabilization toward growth, supported by higher sales, stronger domestic demand and a significant decline in finance costs. The results were compiled from the financial statements of 12 cement companies listed on the Pakistan Stock Exchange and included Lucky Cement, Bestway Cement, Cherat Cement, D.G. Khan Cement, Kohat Cement, Fauji Cement, Attock Cement, Maple Leaf Cement, Pioneer Cement, Gharibwal Cement, Fecto Cement and Power Cement.
The sector generated combined sales of Rs715.50 billion during FY26, representing an 8% increase from Rs664.33 billion recorded in FY25. Lucky Cement remained the largest contributor to sector revenue, generating sales of Rs136.53 billion and accounting for 19% of total turnover. Bestway Cement followed with sales of Rs108.28 billion, representing 15% of sector revenue, while Fauji Cement recorded sales of Rs93.69 billion and accounted for 13% of the combined turnover.
Profitability was concentrated among three major companies, with Lucky Cement, Bestway Cement and Fauji Cement collectively contributing 62% of the cement sector’s total earnings during FY26. Lucky Cement generated profit of Rs46.63 billion, equivalent to 33% of sector earnings, supported by higher net sales, other income of Rs27.98 billion and lower finance costs. Bestway Cement contributed Rs25.76 billion, or 18% of total sector profit, with its earnings supported by a 30% reduction in finance costs and a strong share of profits from investee companies.
Fauji Cement recorded profit of Rs16.18 billion, accounting for 11% of total sector earnings and posting a 21% year-on-year increase. The company’s performance was supported by higher net revenue and reduced finance costs. In contrast, Maple Leaf Cement’s full-year earnings declined 50% year-on-year to Rs8.45 billion. Its finance costs increased 26% to Rs4.49 billion, with the increase linked to debt servicing obligations associated with the acquisition of Pioneer Cement. Kohat Cement also recorded an 8% decline in annual net profit to Rs10.70 billion, although its overall performance remained relatively stable.
The broader operating environment during FY26 remained influenced by Pakistan’s economic recovery and monetary policy developments. Gross domestic product growth recovered to 3.7%, described in the sector review as the highest level in four years, while structural reforms under International Monetary Fund programmes continued to affect economic activity. Average inflation stood at 7.05% during the year. The State Bank of Pakistan lowered its policy rate to 10.5% in December 2025 before increasing it to 11.5% in April 2026, with monetary policy aimed at managing inflation expectations while supporting economic activity.
Cement dispatches also showed improvement during the fiscal year. According to data from the All Pakistan Cement Manufacturers Association, total industry dispatches reached 51 million tonnes in FY26, representing a 7% year-on-year increase. Domestic dispatches grew 10%, while exports declined 2% compared with the previous fiscal year. The sector faced pressure from geopolitical tensions in the Middle East, high energy costs and fluctuations associated with the monsoon season, but stronger domestic offtake, stable selling prices and appreciation of the Pakistani rupee against the US dollar helped offset some of the pressure from weaker exports.
The sector’s cost structure also showed mixed movements. Cost of sales increased 9% year-on-year to Rs487.50 billion from Rs448.45 billion, while gross profit increased 6% to Rs227.99 billion from Rs215.88 billion. Gross margins remained broadly unchanged at 32%. Selling and distribution expenses increased 4% to Rs30.81 billion, while administrative expenses rose 24% to Rs17.68 billion. Lucky Cement recorded the highest selling and distribution expenses at Rs8.99 billion, representing 29% of the sector total, while Bestway Cement reported the largest administrative expenses at Rs3.15 billion.
One of the more significant improvements came from financing expenses. Combined finance costs declined 31% year-on-year to Rs20.54 billion from Rs29.88 billion in FY25, mainly reflecting lower benchmark interest rates during the fiscal year. As a result, sector-wide profit before tax increased 10% to Rs205.34 billion from Rs186.77 billion. Tax payments, meanwhile, increased 3% to Rs62.15 billion from Rs60.29 billion, leaving the sector with a combined profit after tax of Rs143.19 billion.
The outlook for the cement industry is tied closely to developments in construction, housing and infrastructure activity. The economic outlook described in the sector review includes improving macroeconomic conditions, continued engagement with the International Monetary Fund and structural reform measures. A relatively stable exchange rate, strengthening foreign exchange reserves and continued workers’ remittance inflows are also expected to support broader economic activity. The Federal Public Sector Development Programme allocation of Rs1 trillion, along with measures supporting housing finance and infrastructure development, is expected to provide additional activity for construction-related industries.
Lucky Cement said domestic cement demand is expected to build on the recovery recorded during FY26, supported by infrastructure spending, housing-sector incentives and the interest-rate environment. The company also pointed to the inclusion of Non-Banking Finance Companies in subsidized housing finance programmes as a measure that has expanded credit access for consumers and could support domestic cement consumption. Its international operations are also expected to provide opportunities through planned or ongoing expansion in markets including Samawah in Iraq and the Democratic Republic of Congo.
At the same time, cement manufacturers continue to identify energy expenses and external disruptions as important factors for the coming year. Lucky Cement highlighted risks from geopolitical tensions, fuel prices, international coal and petroleum coke prices and disruptions to maritime routes. Fauji Cement expects domestic cement volumes to grow by approximately 8% but pointed to low capacity utilization, elevated energy costs, indirect taxation and the need to develop alternative export markets following weaker trade with Afghanistan.
Maple Leaf Cement expects local demand to benefit from government infrastructure initiatives and a recovery in real estate activity. The company said it would continue focusing on cost reductions and developing a sustainable supply chain for alternative fuels to manage fuel-cost volatility and improve margins. Bestway Cement also pointed to a gradual recovery in construction activity despite geopolitical and global supply-chain challenges. These company-level outlooks indicate that while the sector enters the new fiscal year with improved earnings and domestic demand, energy costs, capacity utilization, taxation and export-market conditions will remain important factors for cement manufacturers.
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