Karachi: According to the data released by All Pakistan Cement Manufacturing Association (APCMA), cement off-takes have surged by 3.48%YoY to 20.451 million tons during 8MFY12 as against 19.764 million in the corresponding period.
According to Alfalah Securities Limited, out of the total, local cement off-takes during the 8MFY12 period stood at 14.83 million tons as compared with 13.82 million in the same period last year, witnessing a significant growth of 7.37%YoY mainly due to revived construction activities across the country in the current financial year and disbursement of PKR 126.1 billion against an allocated target of PKR 290 ban in the Public Sector Development Programme (PSDP), which remained low during FY11. On the other hand, export sales dropped by 5.57%YoY to 5.61 million tons during the 8MFY12 period as compared with 5.94 million tons in the same period last year. Alfalah Securities Limited believes the local off-takes would continue to pick up at a steady pace mainly due the election year coming up where the government may allocate additional development funds to gain popularity among the masses, and the manufacturers would also like to reap the benefits of higher cement prices, which are currently hovering at PKR 425/bag despite a slowdown in international coal prices. Alfalah Securities Limited recommends a “Hold” stance on LUCK at current levels with a DCF based target price of PKR 106 per share.