In a challenging economic landscape marked by fluctuating demand and regulatory changes, Pakistan’s cement industry is poised for a modest growth of 2.4% year-on-year in the fiscal year 2025.
According to a research report by AKD Securities, this projection comes on the heels of a 2% year-on-year increase in cement dispatches during FY24, with total volumes reaching 45.29 million tons.
The growth in FY24 was largely driven by a surge in export volumes, offsetting a decline in domestic sales to a seven-year low. Analysts attribute this mixed performance to higher cement prices, which rose significantly following an increase in Federal Excise Duty (FED) on cement announced in the FY25 budget. Cement prices escalated by PkR125-149 per bag as manufacturers passed on the higher taxes to consumers.
Despite the price hike, industry analysts remain optimistic about the sector’s prospects. The expected growth in FY25 is anticipated to be bolstered primarily by an uptick in exports, as international demand continues to show promise. This positive outlook is further supported by robust gross margins, strong earnings, and ongoing monetary easing policies.
“We maintain a bullish outlook on the sector,” commented industry experts, highlighting companies like Lucky Cement (LUCK), Fauji Cement Company Limited (FCCL), and Maple Leaf Cement Factory Limited (MLCF) as preferred investment picks due to their strong market position and potential for growth.
The cement industry, a cornerstone of Pakistan’s infrastructure development and a key indicator of economic health, is navigating through regulatory changes while capitalizing on export opportunities to sustain growth amidst domestic challenges.
As the fiscal year progresses, stakeholders will be closely monitoring how market dynamics, regulatory shifts, and global economic trends influence the industry’s trajectory and profitability.
