PSX: FCCL

Fauji Cement

Deep Dive Investment Analysis | Nov 2025

PKR 52.37
Target: PKR 65 - 72
+149% (1 Year)
Strong Buy
9.6x
P/E Ratio
vs Industry 14.6x
+62%
Net Profit Growth
Record FY25 Earnings
0.44
PEG Ratio
Significantly Undervalued
2.39%
Dividend Yield
23% Payout Ratio

Financial Strength (FY25)

Gross Margin 35% (Sector Leading)
Revenue Growth +11% YoY
Net Income Growth +62% YoY

Record profits of PKR 13.33Bn driven by cost optimization, high retention prices, and effective fuel mix strategies.

Valuation & Target

Upside Potential

17% - 37%
Current
52.37
Target
65.00
High
72.00
52 Week Low PKR 30.12
52 Week High PKR 62.84

Bull Case (Why Buy?)

  • Cost Leadership: 35% Gross Margins via 75% local coal mix & 59% in-house power generation.
  • Export Dominance: #1 Exporter to Afghanistan (33% Market Share).
  • Cash Flow: Massive operating cash flow of PKR 30.15Bn.
  • Valuation Gap: Trading at 9.6x P/E vs Peer average of 10-11x.
  • Macro Tailwinds: Interest rate cuts and post-flood reconstruction.

Risk Factors

  • Capacity Utilization: Currently low at ~58% (vs installed capacity).
  • Liquidity: Quick ratio of 0.81 indicates reliance on inventory turnover.
  • Royalty Litigation: Ongoing court case regarding Punjab royalty charges.
  • Cyclical Nature: Highly sensitive to Pakistan's construction slowdowns.

Peer Comparison

Company P/E Ratio Market Cap Gross Margin EPS Growth
Fauji Cement (FCCL) 9.6x PKR 128B 35% +62%
Lucky Cement (LUCK) 10.5x PKR 626B ~30% Moderate
Bestway Cement (BWCL) 10.0x PKR 343B ~28% Moderate
DG Khan Cement (DGKC) 9.1x PKR 96B Variable Recovering

Investor Action Plan

Entry Strategy

Accumulate on dips between PKR 50-53. The recent pullback from PKR 62 offers a solid entry point.

Time Horizon

12-24 Months. Allow time for interest rate cuts to stimulate construction demand.

Stop Loss

PKR 45.00 (Psychological support level).