Kohat Cement shows resilience, ratings remain stable

January 15, 2026 (MLN): Kohat Cement Company Limited (KCCL) has maintained its strong credit ratings, showed consistent operational efficiency and robust cost management amid a competitive cement market.

PACRA reaffirmed the company’s long-term rating at A+ and short-term rating at A1, with a stable outlook.

The cement sector showed resilience during FY25, with total dispatches increasing 2.3% to 46.9 million tons, despite a 2.7% decline in domestic sales.

Exports surged nearly 30% to 9.2m tons, helping offset weaker local demand. KCCL reported dispatches of 2.328m tons in FY25, slightly down from 2.585m tons in FY24.

However, the first quarter of FY26 indicated a strong recovery, with total dispatches rising approximately 18.8% to 702,887 tons, driven by a 12.7% increase in domestic sales.

Net revenues for FY25 stood at Rs37.54bn, a marginal 2.9% decline from FY24, largely due to a slight reduction in market share from 5.6% to 4.96%, according to the PACRA.

Despite this, efficient cost management boosted gross margins to 39.2%, up from 29.1% the previous year.

Net profitability also improved, with the net profit margin rising to 30.8%, supported by supplementary income from the company’s investment portfolio.

KCCL continues to invest in expansion and renewable energy. Development at the Khushab greenfield site is underway, with machinery imports planned to match improving domestic demand.

The company has also strengthened its renewable footprint, commissioning a 7.66MW solar project, bringing total installed solar capacity to 17.66MW, with a target of 20MW.

Additionally, construction of a 28.5MW coal-fired power plant at Kohat is progressing on schedule, expected to cut power costs and reliance on the national grid in the next financial year.

Financially, KCCL maintains a strong profile with low leverage and healthy coverage ratios. Shareholders approved a 12m share buy-back, completed in April 2025, reducing paid-up capital to 183.86m shares.

This was followed by a 5:1 stock split in August 2025, aimed at improving liquidity and investor participation.

PACRA’s reaffirmation underscores KCCL’s ability to sustain margins, optimize capacity, and maintain market share amid pricing pressures and competitive dynamics.

A recovering domestic cement demand, favorable construction activity, and macroeconomic stabilization are expected to support the company’s performance in FY26.

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