POWER profit jumps over sevenfold in 9MFY26

April 21, 2026 (MLN): Power Cement Limited (PSX: POWER) recorded a monumental 7.28 times surge in its net profit for the nine months ended March 31, 2026, reaching Rs2.53bn compared to a modest Rs347.93m in the corresponding period last year.

Reflecting this massive bottom-line expansion, the company's basic earnings per share (EPS) skyrocketed to Rs1.91 from a mere Rs0.07 in 9MFY25, while diluted EPS stood at Rs1.82.

This stellar financial turnaround was deeply intertwined with a broader macroeconomic recovery in Pakistan's cement industry.

 After experiencing contraction over the past three years, the sector posted an overall growth of 9.8% in 9MFY26.

Domestic dispatches rose by 10.61%, supported by improved public sector development spending and a gradual uptick in private sector activity.

Operating in the South Zone, Power Cement benefited from a balanced regional dynamic where domestic dispatches rose 3.47% and exports grew by a solid 13.45%.

Capitalizing on this industry-wide recovery, Power Cement’s revenue from contracts with customers grew by 22% year-on-year, hitting Rs25.63bn from Rs21bn.

 Crucially, the company's cost of sales grew at a much slower pace of 9%, reaching Rs16.58bn. Driven by enhanced operational efficiency and favorable cost management, the gross profit saw a massive 56% expansion, jumping to Rs9.05bn from Rs5.8bn.

On the operating side, overheads escalated as the business volume grew.

Selling and distribution expenses increased by 34% to Rs2.67bn, while administrative expenses rose 17% to Rs505.58m.

Despite these higher operational costs and a spike in "other expenses," the sheer strength of the gross margin expansion pushed the company's EBITDA up by a robust 59% to Rs6.23bn from Rs3.92bn. Correspondingly, operating profit surged by 68% to Rs5.52bn.

The most significant catalyst for Power Cement's bottom line occurred below the operating level.

The company successfully slashed its net finance costs by 44%, plummeting to Rs1.41bn from a heavy Rs2.51bn burden recorded last year.

 Management attributed this drastic reduction to lower borrowing levels, easing interest rates, prudent financial management, and crucial support from associated undertakings that contributed toward mark-up obligations, alleviating cash flow pressures.

This massive relief in debt-servicing propelled the profit before taxation and levy up by an astounding 5.4 times to Rs4.11bn.

Even after absorbing a significantly higher levy and a jump in taxation (Rs1.25bn), the company comfortably secured its multi-fold leap in final net profit.

Future Outlook and Strategic Initiatives

Looking ahead, the management noted a mixed economic landscape.

While a recent positive IMF assessment and an expected $1.21bn tranche are anticipated to stabilize external accounts and currency, geopolitical risks specifically US-Iran tensions remain a threat to global oil prices and domestic energy costs.

 Domestically, rising inflation and declining purchasing power could weigh on demand, though government-led subsidized housing finance schemes are expected to provide a counterbalance.

To insulate itself against energy volatility and drive cost optimization, Power Cement announced that its 7.5 MW wind power project is progressing well and is expected to commence operations in the coming months of FY26.

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