KARACHI: D G Khan Cement Company Limited (DGKC) reported better-than-expected earnings for the second quarter of FY26, supported by a sharp improvement in gross margins amid lower fuel costs and operational efficiencies.
The company announced unconsolidated profit of approximately Rs3.69 billion for 2QFY26, translating into earnings per share (EPS) of Rs8.43, reflecting a 71percent quarter-on-quarter increase.
For the first half of FY26, profit rose 66percent year-on-year to Rs5.9 billion, with cumulative EPS reaching Rs13.36.
The earnings out-performance was primarily driven by stronger gross margins. DGKC recorded gross margins of 31.8percent in 2QFY26, significantly higher than 21.7percent in 1QFY26 and 25.1percent in 2QFY25. On a half-year basis, gross margins improved to 26.9percent in 1HFY26 compared to 22.8percent in the corresponding period last year.
Market analysts attributed the margin expansion to lower coal prices and improved operational efficiency during the quarter.
Net revenue for 2QFY26 stood at Rs20.8 billion, up 5percent on a sequential basis. On the volumetric side, domestic cement dispatches remained largely flat on a year-on-year basis but increased 18percent quarter-on-quarter to 1.02 million tons. However, export dispatches declined 23percent year-on-year and 18percent quarter-on-quarter to 0.39 million tons.
The company’s effective tax rate rose to 34.1percent in 2QFY26 compared to 30percent in the same quarter last year. For 1HFY26, the effective tax rate was recorded at 35.2percent, higher than 32.3 percent in 1HFY25.
Finance costs declined sharply during the quarter, falling 71 percent year-on-year and 29 percent quarter-on-quarter to Rs304 million. The reduction was mainly attributed to lower interest rates and a decrease in outstanding debt.
Alongside the financial results, DGKC did not announce any cash dividend, in line with market expectations.
Copyright Business Recorder, 2026
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