⚡ Flash Summary

Kohat Cement Company Limited (KCCL) announced its Corporate Briefing Session for FY 2024-2025. The company’s clinker production capacity increased to 5,022,600 metric tons from 4,949,800 in FY2024. However, the company experienced a decrease in dispatches and capacity utilization during FY2025 compared to FY2024. Despite a drop in revenue, the company demonstrated improved profitability, reflected in higher gross profit and profit after tax.

📌 Key Takeaways

• 🏭 KCCL’s clinker production capacity increased to 5,022,600 metric tons (FY2025) from 4,949,800 metric tons (FY2024).
• 📉 Overall cement industry capacity utilization increased by 1.0% YoY, while KCCL’s capacity utilization decreased by 11.3%.
• 📉 KCCL’s dispatches decreased by 10.0% YoY, with local dispatches down by 9.3% and export dispatches plummeting by 50.1%.
• 📊 Sales – Net decreased from PKR 38,648 million in FY2024 to PKR 37,536 million in FY2025, a 2.9% decline.
• 📈 Gross Profit increased significantly by 30.8% YoY, from PKR 11,256 million to PKR 14,722 million.
• ⬆️ GP Margin improved from 29.1% to 39.2% in FY2025.
• 💸 Total Operating Expenses increased by 51.8% YoY.
• ⬆️ Operating Profit increased by 28.1% YoY, from PKR 10,001 million to PKR 12,816 million.
• ⬇️ Finance Costs decreased significantly by 48.3% YoY.
• ⬆️ Profit before Taxation increased by 28.8% YoY, from PKR 13,776 million to PKR 17,747 million.
• ⬆️ Profit after Tax increased by 30.2% YoY, from PKR 8,893 million to PKR 11,575 million.
• ⬆️ Earnings Per Share (EPS) increased from PKR 9.06 to PKR 11.97.
• ☀️ Company has set up a 15.34 MW Solar Power Plant and is working to increase it up to 20 MW.
• 🔥 Company is setting up a ~28.5MW Coal Fired Power Plant, expected to be concluded by the end of FY2026.
• 🏗️ Infrastructure development is in progress at Greenfield Cement Production Line in Khushab.

🎯 Investment Thesis

HOLD. While KCCL’s improved profitability is encouraging, the decline in revenue and dispatches warrants caution. The company’s ongoing projects, such as the solar power plant and coal-fired power plant, could improve its long-term prospects. A hold rating is appropriate until there is more clarity on the company’s ability to sustain its profitability and improve its market share. We will need to see if the infrastructure development translates to an increase in domestic cement demand.