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Lucky Cement Limited(LUCK) Company Overview: -

Sarmaaya Desk
Sarmaaya Content Team

Lucky Cement Limited (the Company) was founded on September 18, 1993, in Pakistan, under the Companies Ordinance of 1984. (now the Companies Act, 2017). The Company's main business is cement manufacturing and distribution. Pezu, District Lakki Marwat in Khyber Pakhtunkhwa, and Main Super Highway in Karachi, Sindh, are the company's two production facilities. Liaison offices for the Company are also located in Islamabad, Quetta, Multan, D.I. Khan, Lahore, and Peshawar.

In Pakistan, Lucky Cement Limited produces and sells cement. Under the Lucky Cement, Lucky Star, Lucky Gold, and Raj Cement brand names, the company sells ordinary Portland cement, which is used in general construction, concrete mortars, and grouts; sulfate resistant cement, which is used in foundations near the seashore and canal linings; clinkers; composite cement; and block cement. It also makes polyester staple fibre, POY Chip’s soda ash, specialty chemicals, sodium bicarbonate, and polyurethanes; sells seeds, toll-made, and imported pharmaceuticals, animal health products, and general chemicals; acts as an indenting agent and toll manufacturer, and makes and sells pharmaceutical products and infant milk powders. In addition, the firm assembles, markets, distributes and sells a variety of KIA automobiles as well as related services. Lucky Cement Limited also sells its goods internationally. Lucky Cement Limited is based in Karachi, Pakistan, and was formed in 1993.

Company snapshot:
LML company snapshot

The total market value of LUCK at present share price is Rs. 287.8 Billion

Sales and Profits: -

The table shows the sale and the gross profit that the company has made in some previous years. All values are in thousands:

  2020 2019 2018 2017 2016 2015
Sales 41,870,796 48,021,399 47,541,724 45,687,043 45,222,089 44,761,307
Gross profit 6,076,765 13,983,831 16,952,361 21,298,283 21,800,574 20,183,088
LUCKY’s Performance: -

LUCKY is a less volatile stock as compared to other stocks in the sector, and its volatility has been stable over the past year. This helps investors in understanding that the share price will not deviate much. The stock of LUCKY cement is undervalued meaning that the risk of an investor losing his or her money after buying the stock is very low even if the company is not performing at par. Moreover, LUCKY cement is having vast categories of businesses meaning that their risk mitigation strategy is to diversify their business to earn profits. The cement sector struggled a lot in the previous year but after the announcement of this year’s budget cement sector was seen to have a positive impact which can be seen in LUCKY cement too.

Earning per share

EPS in 2018, 2019, and 2020 was 37.72, 32.44, and 10.34 respectively. It is a good value as we see. There was a sudden dip in EPS when the COVID restrictions were imposed but after the recent budget, it is predicted that the EPS of the company will increase. Other than this in Twelve trailing month period, the EPS is 37.41 which is good.

Net Profit vs Gross Profit

Net profit and gross profit margins can be seen decreasing but this does not properly indicate that whether LUCKY cement is a good investment or not. The decrease in net and gross profit is because of the debts taken by LUCKY cement which can be a negative point from investors’ point of view.

Financial Health: -

(All values are in thousands):

  2020 2019 2018 2017 2016
Assets 135,868,474 125,089,214 108,999,117 97,337,365 85,922,406
Liabilities 36,684,613 30,770,797 22,632,295 17,552,384 16,599,568
Equity 99,183,861 94,318,417 86,366,822 79,784,981 69,322,838
Summary: -

LUCKY CEMENT has recently begun the process of obtaining the necessary regulatory permits to continue operations, and as part of this effort, it has applied for a license with the Pakistan Telecommuni­cation Authority (PTA). The production facility for Samsung mobile devices will be built at LMC's existing plant facility in Bin Qasim Industrial Park, a special economic zone, where vehicles are currently being rolled out. The manufacturing plant is expected to be finished by the end of this year. LUCKY cement is previously manufacturing, assembling, marketing, and distributing KIA and Peugeot vehicles.

The production of these Samsung phones are deemed to start in December 2021. This is a great acquisition and this will help LUCKY cement grow and will improve stock value for investors.

This is highly recommended stock and this is the prime time to buy a stock as it is undervalued.

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