Fauji Cement (KASE:FCCL) - Share price, News & Analysis

Q: What is the Fair Price of FCCL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

FCCL (PKR14.83) is trading below our estimate of [[fair value]] (PKR66.08)

FCCL fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	4/6
Financial Health	6/6
Dividends	0/6

FCCL Stock Overview

Fauji Cement Company Limited engages in the manufacturing and selling of various types of cement in Pakistan.

Rewards

Trading at 77.6% below our estimate of its fair value

Revenue is forecast to grow 6.98% per year

Earnings grew by 343.6% over the past year

Risk Analysis

Does not have a meaningful market cap (PKR20B)

Fauji Cement Competitors

D.G. Khan Cement

KASE:DGKC

PK₨26.1b

Cherat Cement

KASE:CHCC

PK₨18.8b

Maple Leaf Cement Factory

KASE:MLCF

PK₨31.1b

Attock Cement Pakistan

KASE:ACPL

PK₨10.3b

Price History & Performance

Summary of all time highs, changes and price drops for Fauji Cement
Historical stock prices
Current Share Price	PK₨14.83
52 Week High	PK₨22.56
52 Week Low	PK₨12.45
Beta	0.47
1 Month Change	6.92%
3 Month Change	-5.06%
1 Year Change	-31.41%
3 Year Change	14.25%
5 Year Change	-59.28%
Change since IPO	61.20%

Shareholder Returns

	FCCL	PK Basic Materials	PK Market
7D	-2.6%	2.7%	1.6%
1Y	-31.4%	-39.7%	-15.8%

Return vs Industry: FCCL exceeded the PK Basic Materials industry which returned -39.7% over the past year.

Return vs Market: FCCL underperformed the PK Market which returned -15.8% over the past year.

Price Volatility

Is FCCL's price volatile compared to industry and market?
FCCL volatility
FCCL Average Weekly Movement	5.2%
Basic Materials Industry Average Movement	6.1%
Market Average Movement	5.3%
10% most volatile stocks in PK Market	8.0%
10% least volatile stocks in PK Market	3.3%

Stable Share Price: FCCL is not significantly more volatile than the rest of PK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: FCCL's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1992	1,113	Qamar Manzoor	https://www.fccl.com.pk

Fauji Cement Company Limited engages in the manufacturing and selling of various types of cement in Pakistan. The company offers ordinary Portland cement, low alkali cement, low heat of hydration cement, and sulphate resistant cement, as well as Mohafiz and Pamir cement. Its cement is used for the construction of dams, tunnels, hydro power projects, sea walls, reservoirs, sewerage lines, water treatment plants, wharfs, harbors, roofs, basements, water logging, saline areas, masonry works, pavements, reinforced concrete works, precast works, and grouts, etc. The company exports its products.

Fauji Cement Fundamentals Summary

How do Fauji Cement's earnings and revenue compare to its market cap?
FCCL fundamental statistics
Market Cap	PK₨20.06b
Earnings (TTM)	PK₨4.70b
Revenue (TTM)	PK₨27.91b

4.4x

P/E Ratio

0.7x

P/S Ratio

Is FCCL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FCCL income statement (TTM)
Revenue	PK₨27.91b
Cost of Revenue	PK₨20.09b
Gross Profit	PK₨7.81b
Other Expenses	PK₨3.12b
Earnings	PK₨4.70b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	3.41
Gross Margin	28.00%
Net Profit Margin	16.84%
Debt/Equity Ratio	9.8%

How did FCCL perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is FCCL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FCCL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for FCCL. This is calculated by dividing FCCL's market cap by their current preferred multiple.
What is FCCL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	PK₨20.06b

FCCL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.5x
Enterprise Value/EBITDA	1.9x
PEG Ratio	0.8x

Price to Earnings Ratio vs Peers

How does FCCL's PE Ratio compare to its peers?

FCCL PE Ratio vs Peers

The above table shows the PE ratio for FCCL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	6.4x
DGKC D.G. Khan Cement	5.6x	n/a	PK₨26.1b
CHCC Cherat Cement	4.4x	12.4%	PK₨18.8b
MLCF Maple Leaf Cement Factory	6.3x	20.3%	PK₨31.1b
ACPL Attock Cement Pakistan	9.3x	58.8%	PK₨10.3b
FCCL Fauji Cement	4.4x	5.3%	PK₨20.1b

Price-To-Earnings vs Peers: FCCL is good value based on its Price-To-Earnings Ratio (4.4x) compared to the peer average (6.4x).

Price to Earnings Ratio vs Industry

How does FCCL's PE Ratio compare vs other companies in the Asian Basic Materials Industry?

Price-To-Earnings vs Industry: FCCL is good value based on its Price-To-Earnings Ratio (4.4x) compared to the PK Basic Materials industry average (5.5x)

Price to Earnings Ratio vs Fair Ratio

What is FCCL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FCCL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	4.4x
Fair PE Ratio	5.1x

Price-To-Earnings vs Fair Ratio: FCCL is good value based on its Price-To-Earnings Ratio (4.4x) compared to the estimated Fair Price-To-Earnings Ratio (5.1x).

Share Price vs Fair Value

What is the Fair Price of FCCL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FCCL (PKR14.83) is trading below our estimate of fair value (PKR66.08)

Significantly Below Fair Value: FCCL is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Fauji Cement forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

5.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: FCCL's forecast earnings growth (5.3% per year) is below the savings rate (10.5%).

Earnings vs Market: FCCL's earnings (5.3% per year) are forecast to grow slower than the PK market (7% per year).

High Growth Earnings: FCCL's earnings are forecast to grow, but not significantly.

Revenue vs Market: FCCL's revenue (7% per year) is forecast to grow faster than the PK market (5.1% per year).

High Growth Revenue: FCCL's revenue (7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: FCCL's Return on Equity is forecast to be low in 3 years time (16.8%).

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Past Performance

How has Fauji Cement performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-5.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FCCL has high quality earnings.

Growing Profit Margin: FCCL's current net profit margins (16.8%) are higher than last year (5.5%).

Past Earnings Growth Analysis

Earnings Trend: FCCL's earnings have declined by 5.3% per year over the past 5 years.

Accelerating Growth: FCCL's earnings growth over the past year (343.6%) exceeds its 5-year average (-5.3% per year).

Earnings vs Industry: FCCL earnings growth over the past year (343.6%) exceeded the Basic Materials industry 66.4%.

Return on Equity

High ROE: FCCL's Return on Equity (17.9%) is considered low.

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Financial Health

How is Fauji Cement's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: FCCL's short term assets (PKR16.2B) exceed its short term liabilities (PKR7.2B).

Long Term Liabilities: FCCL's short term assets (PKR16.2B) exceed its long term liabilities (PKR4.4B).

Debt to Equity History and Analysis

Debt Level: FCCL has more cash than its total debt.

Reducing Debt: FCCL's debt to equity ratio has reduced from 19.5% to 9.8% over the past 5 years.

Debt Coverage: FCCL's debt is well covered by operating cash flow (209.1%).

Interest Coverage: FCCL earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Fauji Cement current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

9.27%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate FCCL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate FCCL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FCCL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FCCL's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: FCCL is not paying a notable dividend for the PK market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as FCCL has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure

CEO

Qamar Manzoor

2.17yrs

Tenure

Mr. Qamar Haris Manzoor serves as Chief Executive Officer and Managing Director at Fauji Cement Company Limited since June 10, 2020 and served as its Director since June 10, 2020. He served as a Non-Execut...

Leadership Team

Experienced Management: FCCL's management team is considered experienced (2.2 years average tenure).

Board Members

Experienced Board: FCCL's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30