D. G. Khan Cement Company Limited (DGKC): Lower int’l coal prices to cushion margins; Buy – By JS Research
Nov 27 2025
JS Global Capital
- We reiterate our Buy rating on DGKC, though we’ve trimmed our FY26E–FY28F EPS estimates by 6-7% owing to weaker North region prices and supply disruptions of Afghan coal; however, lower international coal prices are expected to partially offset the impact, especially in the South. Our revised SoTP-based Dec-2026 stands at Rs283 (down 7%).
- Management, in its recently held briefing, highlighted that due to Afghan border issues, the company has primarily shifted to international coal, which now comprises up to 90% of the total fuel mix. Intl coal prices are currently hovering around US$100 110/ton (including duties) and are expected to remain stable in the near term.
- Company expects double-digit growth in domestic dispatches in FY26, supported by the 18% growth already seen in 4MFY26. Conversely, export dispatches are likely to see limited growth as the South plant is operating at optimal capacity (106% in FY25) and owing to high base-effect from FY25, though a strategic shift toward more cement exports instead of clinker are likely to improve export retention prices.
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