m AZEEM AKHTAR ( GROUP LEADER)

m DANISH
m AQIB SHSHZAD
m MUHAMMAD MUZAMMIL
m WAQAR HUSSAIN
m SHOIB HABIB
m UMAIR LAVAI
m SUBHAN
Lucky Cement is currently the largest cement
manufacturer of Pakistan with annual
production capacity of 9.0 million tonnes.
The Company currently has two
manufacturing facilities in Pakistan.
m The Pezu Plant in North West Frontier
Province with annual capacity of 5 million
tonnes (13,000 tonnes per day).
m The Karachi Plant in Sindh Province with
annual capacity of 4 million tonnes (12,000
tonnes per day).
m @
 
  



    
 




   
  


 
      


  
 
 
   
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m Local cement demand has grown by 1.6x
the GDP growth over the last ten years.
m Housing demand.
m Government's spending on development-
related projects.
m Relatively price inelastic, so price not a
major demand influencer.
m Standardized product.
÷
 

m Pakistan's extensive cement sector consists of 25 cement

companies. These companies are operating with a combined 29
cement plants. Out of these plants, 19 are located in the
northern region of the country and remaining 10 are located in
southern region. The total production capacity of the cement
sector stands at 44.82 MTPA (million tonnes per annum) as per
data issued by APCMA. Going forward, this capacity will
increase during FY11, owing to expansions undertaken by Fauji
cement and Gharibwal Cement (GWCL), all based in the
northern part of the country. Taking cue from that, we estimate
total capacity of the industry to touch 47.5 MTPA during the
current year FY11-FY12. In light of this, Pakistan's leading
producers such as Lucky Cement (LUCK), DG Khan Cement
(DGKC) and Attock Cement (ACPL) have taken a first mover
advantage by undergoing expansions and they are in line with
tapping local demand as well as export opportunities emanating
from Afghanistan, UAE, far east and African countries.
 LUCK
15%

DGKC
9%

OTHER
65% BWCL
11%
 LUCK
OTHER 31%
36%

ACPL
DWCL
23%
10%
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  (-& ./01* ./0* ./! ./.
Net Sales 26,547 24,508 24,583 25,666
Cost of Sales 16,519 16,529 16,233 17,814
Gross profit 10,027 7,978 8,349 7,851
Selling & Admin. 2,594 3,736 2,704 2,480
Exp.
Other income 23 2 118 (47)
Other Charges 827 257 520 506
Profit Before Tax 5,177 3,417 4,676 4,556
Tax 580 280 924 1,005
Profit After tax 4,597 3,137 3,752 3,551
m LUCK with Fair value of PKR 77.2/
share offering an upside potential of
15.6% from current level. We have value
LUCK on Discounted cash flow method
(DCF). Trading at FY11E PER of
5.98x, with estimated ROE of 13.31 for
the period FY11, we believe LUCK
trades at a discount to its worth
m Lucky cement is one of the largest cement
manufacturers in the country with the
added advantage of simultaneous
presence of both the regions of country.
We expect the ongoing development of
waste heat recovery in the company's plant
and other business diversification to boost
the company's margins in the sky during
the years to come. We maintain our Buy
rating on the Lucky cement with 1-year
target price of Rs 77.2/share.