BMA Research has reviewed the performance of Pakistan-based Maple Leaf Cement Factory (MLCF) and projected an optimistic outlook, driven by an anticipated rebound in local demand. Domestic sales are expected to grow by three per cent in the FY25-26, followed by a further five per cent increase in 2027. Analysts attribute this growth to a backlog in construction demand, stable input costs and the timely easing of monetary policy, which is expected to stimulate construction activity across the region.
Remarkably, the company’s performance in FY24-25 has exceeded initial expectations, with a projected YoY decline of only five per cent—an improvement on earlier forecasts that had anticipated a 10 per cent drop.
Notably, MLCF’s strategic expansion is proving crucial in capturing increased market share. As the company enters its fourth expansion cycle, it has raised its production capacity to 8Mta, increasing its sector industry share from 8.2 per cent to 9.6 per cent. This positions MLCF as the fourth-largest cement producer in Pakistan and underscores its commitment to strengthening its industry presence.
The ongoing phase of monetary easing is also expected to catalyse growth for the company. Falling interest rates are likely to incentivise large-scale public sector projects, enabling greater fiscal flexibility and boosting construction activity.
In addition, MLCF is well placed to benefit from an efficient energy mix, which is expected to enhance gross margins – from 32 per cent in FY23-24 to between 33 and 37 per cent over the next three fiscal years. The company’s emphasis on lower-cost local coal and its robust power generation strategy—including a coal-fired power plant and waste heat recovery systems—is central to this margin improvement.
Despite ongoing challenges in the broader industry, MLCF is benefiting from a trend of pricing discipline, which is helping to sustain healthy margins. Recent price increases highlight the industry’s focus on preserving profitability amid low utilisation rates, ensuring that companies such as MLCF remain able to service their debts effectively.
Furthermore, MLCF’s financial position continues to strengthen, supported by a deleveraging trend. Since FY22-23, the company has repaid PKR7.6bn (US$27m) in debt, reducing its interest-bearing liabilities to PKR15.3bn as of March 2025. Analysts expect this trend to continue, underpinned by strong cash generation and significantly lower financial charges.
In summary, Maple Leaf Cement stands at a pivotal juncture. A favourable market outlook, strategic capacity expansion, and prudent financial management are aligning to support its projected growth trajectory in the coming years.
by Abdul Rab Siddiqi, Pakistan
