Shares of Pakistan’s listed cement companies have plunged to multi-year lows relative to the cement they produce, creating one of the rare “deep value opportunities” in the market.
The sector (excluding Lucky Cement) is currently trading at levels far below its historical averages. Experts estimate that if valuations return to normal ranges, investors could see gains of 28%, and up to 56% if the market hits previous peak levels.
The slump comes as US–Iran geopolitical tensions push international coal and oil prices higher, increasing production costs for cement manufacturers. Despite these challenges, domestic production has remained steady, with companies maintaining healthy dispatch volumes and stable earnings.
The following chart by Arif Habib Limited (AHL) illustrates how PSX-listed cement stocks are trading well below their historical benchmarks.
While the sector appears undervalued, ongoing war tensions and fuel price volatility could continue to pressure margins in the near term.