External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

Topline Securities is one of the fastest growing brokerage houses in Pakistan. It has strong equity brokerage, economic / equity research, mutual fund distribution, commodity trading and corporate finance & advisory functions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>FCCL announced its 3QFY26 result today, where the company recorded earnings of Rs3.46bn (EPS: Rs1.41), up by 62% YoY and down 14% QoQ.</li><li>The result came below industry expectations primarily due to higher-than-expected effective tax rate (ETR). While gross margins remained in line with expectations.</li><li>Effective tax rate in 3QFY25 stood at 42% compared to 35% in 2QFY26 and 39% in 3QFY25.</li></ul>

FCCL announced its 3QFY26 result today, where the company recorded earnings of Rs3.46bn (EPS: Rs1.41), up by 62% YoY and down 14% QoQ.The result came below industry expectations primarily due to higher-than-expected effective tax rate (ETR). While gross margins remained in line with expectations.Effective tax rate in 3QFY25 stood at 42% compared to 35% in 2QFY26 and 39% in 3QFY25.

Fauji Cement (FCCL): 3QFY26 EPS at Rs1.41, Up by 62% YoY (Earnings Lower Than Industry Expectations)

<ul><li>FCCL announced its 1QFY26 result today, where the company recorded earnings of Rs3.29bn (EPS of Rs1.34), up by 2% YoY.</li><li>The result came lower than expectations due to lower gross margins. Company recorded gross margins of 32% in 1QFY26 compared to 34% in 1QFY25 and 39% in 4QFY25. While we expecting gross margins of 37%.</li><li>Alongside the result, the company did not announce any cash dividend in 1QFY26 which was also according to expectations.</li></ul>

FCCL announced its 1QFY26 result today, where the company recorded earnings of Rs3.29bn (EPS of Rs1.34), up by 2% YoY.The result came lower than expectations due to lower gross margins. Company recorded gross margins of 32% in 1QFY26 compared to 34% in 1QFY25 and 39% in 4QFY25. While we expecting gross margins of 37%.Alongside the result, the company did not announce any cash dividend in 1QFY26 which was also according to expectations.

Fauji Cement (FCCL): 1QFY26 EPS at Rs1.34, Up by 2% YoY (Earnings Lower Than Expectations)

Thematic (Sector/Industry)

<ul><li>Pakistan's local cement dispatches are expected to increase by 11% YoY to 3.59mn tons in Jul-2026.</li><li>The YoY growth is primarily attributable to sustained momentum in domestic cement demand, driven by a gradual pickup in housing and construction activity.</li><li>This brings Pakistan's total cement dispatches to approximately 4.29mn tons in Jul-2026, up 2% YoY but down 1% MoM.</li></ul>

Pakistan's local cement dispatches are expected to increase by 11% YoY to 3.59mn tons in Jul-2026.The YoY growth is primarily attributable to sustained momentum in domestic cement demand, driven by a gradual pickup in housing and construction activity.This brings Pakistan's total cement dispatches to approximately 4.29mn tons in Jul-2026, up 2% YoY but down 1% MoM.

Pakistan Cements - Local Cement Dispatches Likely to Be Up by 11% YoY in Jul 2026; FY27 Begins With Sustained Momentum in Domestic Cement Demand

<ul><li>Topline Cement Universe is expected to post profitability of Rs20.54bn in 4QFY26 against profit of Rs18.81bn in 4QFY25, up by 9% YoY and down by 10% QoQ.</li><li>The YoY increase in earnings is primarily driven by increase in net sales amid higher retention prices.</li><li>Net sales are expected to reach Rs116.32bn in 4QFY26, reflecting growth of 23% YoY and 10% QoQ.</li></ul>

Topline Cement Universe is expected to post profitability of Rs20.54bn in 4QFY26 against profit of Rs18.81bn in 4QFY25, up by 9% YoY and down by 10% QoQ.The YoY increase in earnings is primarily driven by increase in net sales amid higher retention prices.Net sales are expected to reach Rs116.32bn in 4QFY26, reflecting growth of 23% YoY and 10% QoQ.

Pakistan Cements - Cement Profitability Likely to Be Up by 9% YoY in 4QFY26; Led by Increase in Local Volumetric Sales

<ul><li>We have revised our cement sector earnings estimates downward by an average of 15–20% for FY26 and FY27. The revision reflects a weaker macroeconomic outlook stemming from the ongoing US-Iran conflict and its broader economic implications.</li><li>Domestic growth expectations moderated: Local cement dispatches rose by ~9% YoY during 11MFY26, supported by improving macroeconomic conditions, lower interest rates earlier in the year, and a gradual recovery in construction activity.</li><li>Higher coal prices to pressure margins: Following the US–Iran conflict, international coal prices rebounded sharply, reaching US$112/ton in May-26 compared to US$96/ton in Feb-26 and an FY25 average of US$101/ton.</li></ul>

We have revised our cement sector earnings estimates downward by an average of 15–20% for FY26 and FY27. The revision reflects a weaker macroeconomic outlook stemming from the ongoing US-Iran conflict and its broader economic implications.Domestic growth expectations moderated: Local cement dispatches rose by ~9% YoY during 11MFY26, supported by improving macroeconomic conditions, lower interest rates earlier in the year, and a gradual recovery in construction activity.Higher coal prices to pressure margins: Following the US–Iran conflict, international coal prices rebounded sharply, reaching US$112/ton in May-26 compared to US$96/ton in Feb-26 and an FY25 average of US$101/ton.

Pakistan Cements - Earnings Revised Downward; Market Weight Maintained

Pakistan

Fauji Cement Company Limited manufactures and sells cement.

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Fauji Cement (FCCL PA)

Fauji Cement (FCCL): 3QFY26 EPS at Rs1.41, Up by 62% YoY (Earnings Lower Than Industry Expectations)

FCCL announced its 3QFY26 result today, where the company recorded earnings of Rs3.46bn (EPS: Rs1.41), up by 62% YoY and down 14% QoQ. The result...

Topline Securities

Fauji Cement (FCCL): 1QFY26 EPS at Rs1.34, Up by 2% YoY (Earnings Lower Than Expectations)

FCCL announced its 1QFY26 result today, where the company recorded earnings of Rs3.29bn (EPS of Rs1.34), up by 2% YoY. The result came lower than...

Topline Securities

Pakistan Cements - Local Cement Dispatches Likely to Be Up by 11% YoY in Jul 2026; FY27 Begins With Sustained Momentum in Domestic Cement Demand

Pakistan's local cement dispatches are expected to increase by 11% YoY to 3.59mn tons in Jul-2026. The YoY growth is primarily attributable to...

Topline Securities

Pakistan Cements - Cement Profitability Likely to Be Up by 9% YoY in 4QFY26; Led by Increase in Local Volumetric Sales

Topline Cement Universe is expected to post profitability of Rs20.54bn in 4QFY26 against profit of Rs18.81bn in 4QFY25, up by 9% YoY and down by...

Topline Securities

Pakistan Cements - Earnings Revised Downward; Market Weight Maintained

We have revised our cement sector earnings estimates downward by an average of 15–20% for FY26 and FY27. The revision reflects a weaker...

Topline Securities

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