Cement Demand Rises 7.2% in FY26: Positive for Cement Stocks

New data from the All Pakistan Cement Manufacturers Association (APCMA) shows that the country's cement industry experienced a notable 7.21% increase in total dispatches during the fiscal year ended June 30, 2026. This growth, with 50.515 million tons supplied to both domestic and export markets, up from 47.116 million tons in the previous year, signals a healthy trend for the sector.

The primary driver behind this overall increase was a strong surge in local sales, which climbed by 9.5% from 37.906 million tons in FY25 to 41.507 million tons in FY26. While exports faced a slight decline of 2.19%, dropping to 9.008 million tons, the robust domestic performance more than compensated for this.

Looking at the month of June 2026 alone, the growth was even more pronounced, with total cement dispatches hitting 4.331 million tons, an 18.38% increase over June 2025. Local sales in June 2026 jumped by 26.78% year-on-year, reaching 3.541 million tons. North-based cement mills led this charge, supplying 3.019 million tons in June, a 16.39% increase, while southern mills also saw a 23.23% rise in dispatches.

Here is a summary of the key dispatch figures:

What the cement demand data showed

For cement manufacturers, higher dispatches, which are essentially sales volumes, directly translate into increased revenue. The strong growth in local demand, particularly the 9.5% rise for the full fiscal year and the even sharper 26.78% jump in June, is a significant positive. This indicates a pickup in construction activity within the country, which is the primary driver for cement consumption. Increased volumes allow cement companies to better utilize their production capacity, which can lead to improved operating efficiency and potentially better profit margins. While the slight dip in exports is a minor headwind, it is largely overshadowed by the robust domestic performance, which forms the bulk of the industry's sales.

Why it matters for cement stocks

This positive trend in cement demand is beneficial for all listed cement manufacturers. Companies like Lucky Cement, the largest player in the sector, will see direct benefits from increased sales volumes. Other major players such as Maple Leaf Cement, Fauji Cement, Kohat Cement, Cherat Cement, Pioneer Cement, and D.G. Khan Cement are also poised to gain from this sector-wide improvement. The increase in local dispatches means more business for these companies, supporting their top-line growth and potentially improving their profitability. The strong performance of both northern and southern mills suggests a broad-based recovery in domestic construction activity.

Which stocks, and why

Investors should keep an eye on several factors that could influence future cement demand and profitability. Continued government spending on infrastructure projects, often channeled through the Public Sector Development Programme (PSDP), will be crucial for sustaining local demand. Trends in private sector construction, which can be influenced by interest rates and overall economic sentiment, are also important. On the cost side, international coal prices, a key input for cement production, and the PKR/USD exchange rate, which affects the cost of imported coal, will impact margins. The industry's expectation of further growth following the resolution of regional conflicts could also be a factor to watch, potentially opening up better export opportunities or contributing to broader economic stability that fuels construction.