Lucky Cement rated ‘AA+’ on strong liquidity

March 03, 2026 (MLN): Lucky Cement Limited (PSX:LUCK), one of Pakistan’s leading cement manufacturers, has had its entity ratings reaffirmed at ‘AA+/A1+’ (Double A plus/A One plus) by VIS Credit Rating Company Limited (VIS), accompanied by a “Stable” outlook.

The medium- to long-term rating of ‘AA+’ reflects the company’s high credit quality and strong protection factors, while the short-term ‘A1+’ rating signals a very high likelihood of timely repayment of obligations, underpinned by excellent liquidity.

The previous rating update was issued on November 8, 2024.

According to VIS, the reaffirmed ratings reflect Lucky Cement’s strong cash flows, professional management, and solid sponsor backing, supported by operational synergies across the group.

These strengths mitigate medium business risks inherent to the cement sector, such as cyclical demand, exposure to foreign exchange fluctuations from imported coal, and sensitivity to energy costs.

The industry remains capital-intensive with high entry barriers and an oligopolistic market structure, with performance closely linked to macroeconomic trends and government infrastructure spending.

The company’s financial profile remains robust. Profitability has improved, driven by higher dispatch volumes from its new Pezu plant line and increased dividend income from subsidiaries.

Liquidity is strong, supported by healthy cash reserves and favorable liquidity metrics, while conservative gearing and low leverage ensure solid debt-servicing capacity.

 Lucky Cement also generates approximately 55% of its power from renewable sources, boosting sustainability and cost efficiency.

Additionally, the implementation of UTIS (UC3) technology at two Karachi plant lines has optimized clinker output and reduced coal consumption, with plans to extend the system to remaining production lines.

Incorporated in 1993, Lucky Cement operates production facilities in Khyber Pakhtunkhwa and Karachi and is a key member of the Yunus Brother Group (YBG), a diversified conglomerate with interests spanning cement, textiles, power, chemicals, automobiles, mobile devices, pharmaceuticals, healthcare, real estate, entertainment, mining, and commodities.

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