Pakistan Budget Spurs Cement and Textile Stock Rally, Lifting PSX
Lucky Cement shares soared 8% as the budget allocated significant funds for housing and infrastructure, directly lifting cement demand. Reduced excise duties and lower coal import taxes further brighten earnings outlook. The stock is the most liquid cement play on the PSX.
- ▲ Rs 2.2 trillion infrastructure spending in budget
- ▲ Reduction in excise duty on cement from 16% to 12%
- ▼ Rising international coal prices
- ▼ Delay in public works contract awards
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What is the price target for Lucky Cement after this budget?
Brokerages have raised their 12-month target to PKR 1,200, implying a further 15% upside from current levels, based on projected 20% earnings growth.
Will Lucky Cement benefit more than other cement stocks?
As the largest cement producer with 25% market share, Lucky Cement is poised to capture a disproportionate share of new infrastructure contracts, making it a preferred pick.
What risks could derail Lucky Cement's rally?
A reversal in coal price declines or unexpected regulatory changes could squeeze margins. Additionally, any delay in government spending could dampen volume growth.