Lucky Cement is reaping the benefits of expansion

According to AKD Research, Lucky Cement has demonstrated prowess in seizing opportunities, particularly through efficient coal inventory procurement, per management guidance. This strategy has resulted in the company achieving the highest gross margins among its peers, standing at 36.4 per cent in 1HFY23-24, with unconsolidated earnings doubling over the previous year. Similarly, consolidated earnings remained robust, driven by the growth in power subsidiary earnings (up 84 per cent YoY) and a substantial increase in revenues from foreign operations (Iraq and DR Congo), which rose by 74 per cent YoY in 1HFY23-24.

The 3.15Mta capacity expansion in the previous year has already started to bear fruit, with the company's domestic market share increasing to 17.2 per cent in 1HFY23-24 from 14.9 per cent in the same period last year. Additionally, the company's total exports have seen significant growth, increasing by 62 per cent YoY during the first half to 0.94Mt compared to 0.58Mt in the same period last year, where the company’s storage facilities at the port help in this prospect.