Pakistan’s cement sector is expected to post strong growth in the current fiscal year according to a report by brokerage house Topline Securities.
In a note, the firm said it is maintaining its overweight stance on the Pakistan Cement sector in anticipation of the expected recovery on both demand and pricing side.
In our base case, we had assumed domestic dispatches growth of 8 percent in both north and south regions. However, recent trends of Jul and Aug 2025 suggest the actual growth could be much higher. In July 2025, domestic cement sales were up 18 percent YoY, while the first 17 days of August were depicting trend of 28 percent YoY. It said 2MFY26 domestic sales could depict YoY growth of 20-25 percent.
The better-than-expected domestic demand is on the back of multiple factors which includes monetary easing and revival in construction sector and infrastructure projects. Furthermore, the firm expects the same stabilization and thereafter growth in cement prices backed by strong demand.
Historically, July and August sales contributes 7 percent -8 percent each to total annual cement sales, this trend suggest FY26 domestic sales to reach 42-45 million tons, up 13-20 percent. This will take domestic utilization of cement plants to 52-54 percent from FY25 level of 44 percent.
Pakistan domestic cement sales were continuously on falling streak since FY22 year. The peak sales were 48 million tons in FY21, while FY25 domestic sales was 37 million tons.
The firm said it is maintaining its base case volumetric forecast of 8 percent for FY26 for another 1-2 months till it gets further clarity on outlook of growth.
Topline said it has revised its earlier estimates of cement earnings by simple average of 5-7 percent for FY26 due to multiple factors including better than expected domestic demand recovery in FY25, and lower coal costs.
The firm said that the consensus growth forecast of these industry players for FY26 was in range 3-6 percent largely, however, it continued with its assumption of 8 percent. However, recent numbers of 2MFY26 suggests growth percentage can cross 12 percent, in its view.
Topline expects the cement prices are also expected to show recovery in FY26 on the back of improving demand and domestic utilization.
The full report of Topline Securities can be viewed here.