Bestway Cement's AA- long-term entity rating maintained by PACRA

September 03, 2026 (MLN): PACRA has maintained its entity ratings on Bestway Cement Limited (PSX:BWCL), affirming a long-term rating of AA- and a short-term rating of A1+, with a stable outlook.

The rating agency, in its latest review dated September 2, 2026, kept both ratings unchanged from the previous assessment carried out on September 3, 2025, with no rating watch attached to either.

The ratings reflect the company's strong operating and financial profile, underpinned by resilient volumes, a competitive cost structure, and a growing renewable energy portfolio.

During FY26, industry dispatches rose 7.2% YoY to 50.6mn tons, driven by a nearly 9.5% increase in domestic dispatches amid lower interest rates, easing inflation, and improving construction activity.

At the company level, net turnover remained broadly stable at Rs108.3bn (FY25: Rs107.8bn), supported by higher domestic volumes and improved realizations.

Gross profit margin, however, narrowed to 30.0% (FY25: 34.6%) amid elevated fuel and operating costs, particularly higher imported coal prices, which touched approximately $113/ton in the fourth quarter of FY26.

The impact of higher energy costs was partly offset by the company's renewable energy portfolio, comprising 114.3MW of solar capacity and 67.5MW of Waste Heat Recovery Power Plants (WHRPPs), which reduces reliance on grid electricity and supports lower power costs for its operations.

As a result, operating profit declined 16.72% YoY to Rs26.5bn.

Lower finance costs, however, more than offset the decline in operating profitability, supporting a 7.9% YoY increase in profit after tax to Rs25.8bn (FY25: Rs23.9bn), along with an improvement in net profit margin to 23.8% from 22.1% in the same period last year.

The ratings are further supported by the group's strategic investment in United Bank Limited (UBL), with its approximately 9.6% shareholding providing recurring dividend income.

PACRA said the ratings derive strength from the company's established market position, strong sponsor profile, and prudent financial management, adding that continued focus on operational efficiency and disciplined capital allocation remains important in preserving financial flexibility.

Going forward, the company's ability to navigate industry overcapacity, input cost volatility, pricing pressures, and export constraints will remain key rating considerations.

Bestway Cement Limited is the largest cement manufacturer in Pakistan, with an installed capacity of approximately 15.323mn tons per annum across five integrated facilities, according to A%MA data as of June 30, 2025.

The company draws on a geographically diversified footprint, a robust distribution network, and a well-established market position.

Bestway International Holdings Limited holds 56.43% of the company's shares, while the Bestway Group and associated parties collectively hold 72.68%, showcasing strong sponsor backing.

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