PACRA Maintains Entity Ratings of Fauji Cement Company Limited

The assigned ratings of Fauji Cement Company Limited (FCCL) reflect the Company’s established market position, stable ownership structure, and currently manageable financial risk. FCCL continues to rank as the third-largest cement manufacturer in Pakistan, supported by a well-established nationwide distribution network, which provides operational flexibility and supports its competitive positioning. During FY25, the cement industry recorded total dispatches of 46.2 MT compared to 45.3 MT in FY24, with higher exports partially offsetting moderation in domestic demand. In 1HFY26, industry dispatches increased by approximately 10% YoY to 25.8 MT, primarily driven by a recovery in domestic sales amid improving macroeconomic indicators, easing inflation, and relative stabilization in interest rates. FCCL achieved cement dispatches of 5.37 MT in FY25 and 3.0 MT in 1HFY26 (FY24: 5.08 MT and 1HFY25: 2.8 MT), comprising 4.81 MT of domestic sales and 0.56 MT of exports, mainly to Afghanistan. The Company maintained a market share of approximately 11.62% in FY25, reflecting its sustained competitive positioning and effective market penetration. During 1QFY26, FCCL’s financial performance remained stable, building on the improvements achieved in FY25. Net revenues increased to PKR 23,418 million (1QFY25: PKR 22,956 million), supported by higher dispatch volumes, while pricing remained largely stable. Profitability moderated sequentially but remained healthy, with gross profit margin recorded at 31.5% (1HFY26: 33.2%) and net profit margin at 14% (1HFY26: 15.5%), reflecting seasonal demand pattern and relatively weak retention prices, while cost efficiencies from higher self-generated power and alternative fuel usage through the expansion of waste heat recovery capacity to 48.5 MW and solar power capacity to 67.5 MW continued to set-off the impact of the dip in retention prices. FCCL continued its focus on cost optimization and sustainability initiatives. From a financial risk perspective, the Company’s net working capital cycle increased to 50 days in FY25, primarily due to higher inventory levels; however, liquidity remained adequate, supported by strong internal cash generation. Free Cash Flow from Operations stood at PKR 26.38 billion, while interest coverage improved to 4.7x, indicating comfortable debt-servicing capacity. Leverage declined following repayment of long-term project loans. As of September 2025, leverage remained moderate at approximately 32.7%, supported by limited reliance on short-term borrowings. Furthermore, the planned acquisition of a 46.01% stake in Attock Cement Pakistan Limited at PKR 330.41 per share is expected to increase leverage in the near term; however, it is anticipated to enhance the Company’s strategic positioning, strengthen its market presence, and improve access to southern export markets.
FCCL’s rating is supported by its scale and geographically diversified operations providing operational flexibility. The Company’s earnings profile has improved in recent periods, supported by better price retention and cost optimization, though it remains exposed to industry cyclicality. Leverage is currently manageable; however, potential increase may arise from ongoing expansion-related initiative. Strong and stable sponsor support from the Fauji Foundation continues to underpin financial flexibility, liquidity support, and governance oversight.

About the Entity
Fauji Cement Company Limited (FCCL) is a publicly listed cement manufacturer incorporated in Pakistan in 1992 and listed on the Pakistan Stock Exchange since 1996. The Company commenced operations in 1997 and is engaged in the manufacturing and sale of cement and allied products. FCCL operates as a subsidiary of Fauji Foundation, which directly holds 61.65% of the Company’s equity. Including associated and related undertakings, total group ownership stands at 66.81%. The Company is governed by a nine-member Board of Directors, chaired by Lt. Gen. Anwar Ali Hyder (Retd.), with Mr. Qamar Haris Manzoor serving as Chief Executive Officer, a seasoned expert with over 30 years of experience in plant and project management, supported by a skilled team.