Investor Presentaiton

Cement Outlook: Stable • • • Post covid-19 lockdown, the cement dispatches has shown significant growth. Total dispatches are expected to register more than ~20% YOY growth during FY21 on account of low base effect and increase in construction activity. During FY21, the government has announced construction package along with other regulatory relaxations to support spur construction activity. These measure are yielding positive results as the sector has shown positive growth since then. Recently, many cement players has announced capacity expansion, the production capacity of the sector is expected to cross ~80 MMT in 2023. Amid low PSDP spending growth in local consumption from private consumers would be crucial for the sector. The sectors profitability is highly sensitive to change retention prices, low capacity utilization usually increase competition amongst local players and hence reduce the retention prices. PACRA The sector has been benefitted from low interest rate and low coal prices during 1HFY21. Interest rate are expected to increase in coming periods and average coal prices are also expected to increase in 2HFY21 as compare to 1HFY21. Both these changes will have a negative impact on sector's profitability. The growth in export of clinker to Bangladesh is expected to remain robust owing to growing economy of the country and non- availability of indigenous raw material locally. Whereas, the export of cement to Afghanistan is expected to remain under pressure owing to influx of cheaper Iranian cement. 20

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