Cement sector expected to see profits soar 38% in most recent quarter

Pakistan’s leverage-laden cement industry is poised to turn in its strongest June-quarter earnings in four years, according to a fresh preview by Topline Securities. The brokerage projects aggregate after-tax profit for its five-company universe at Rs17.8 billion for 4QFY25, a leap of 38% year-on-year that more than offsets a lacklustre domestic demand backdrop. The upgrade rests on three pillars: sharply lower finance costs, a surprise bounce in exports, and another round of incremental price rises at the retail end.

Net revenue is expected to rise 8% YoY to Rs96.7 billion, reflecting a mix of higher retention (ex-factory) prices and better realised dollar prices on outbound cargoes to Sri Lanka, East Africa and the Gulf. Equally important, interest expense across the universe is seen sliding 25% YoY to Rs3.6 billion as a string of State Bank rate cuts feed through to floating-rate debt and several producers use free cash‐flow to pay down working-capital facilities.

For context, finance charges devoured more than one-third of sector earnings in FY23 when the policy rate peaked at 22%. Topline’s arithmetic implies the interest bite is now back in single digits – a game-changer for an industry whose expansion spree was funded largely with rupee loans.