The Pakistan cement sector is expected to see a notable decline in profitability for the third quarter of fiscal year 2026, according to a preview report from BMA Research. Core earnings for the industry are projected to reach PKR23.3bn (US$83.5m), representing a 26 per cent drop compared to the same period last year and a 12 per cent decline from the previous quarter. This downturn is largely attributed to weaker performance from major industry players like Lucky Cement Ltd and Maple Leaf Cement. 

While net sales are anticipated to grow by 8.7 per cent YoY to reach PKR124.8bn, they are expected to fall by 8.2 per cent on a quarterly basis. The yearly growth is supported by a 4 per cent increase in cement prices and a 10 per cent rise in dispatches. However, overall gross margins are likely to compress to 31 per cent, down from 33.4 per cent in the previous quarter. This margin pressure stems from an 11 per cent decrease in local dispatches during the Ramadan and Eid holidays, alongside rising operational expenses.

Input costs have climbed as coal prices for producers averaged US$98.8/t, marking an 11 per cent increase from the previous quarter. On a positive note, financial charges are expected to fall by 24 per cent to PKR2.7bn due to lower debt levels and a reduction in the benchmark interest rate. Other income for the sector is estimated at PKR9bn a significant 54 per cent drop from the previous year, with Lucky Cement Ltd contributing nearly half of that total.

By Abdul Rab Siddiqi, Pakistan

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