The country’s cement sector posted a stellar increase in profits of 100pc QoQ as profit after tax stood at Rs12.5bn for 3QFY21 against Loss after tax (LAT) of Rs1.8bn for 3QFY20 while gross margins stood at 30pc against 4pc and 25pc for 3QFY20 and 2QFY21 respectively. The increase in profitability was supported by an exuberant increase of 23pcYoY in dispatches as the government has provided various incentives to the construction sector in order to kick start economic growth post-COVID-19 related disruptions. Shahrukh Saleem, a senior investment analyst at AKD Securities Limited said that additional impetus was provided by 18pcYoY increase in retail price in North as post conclusion of the expansion cycle, price competition among local manufacturer came to an end. “Resultantly, gross margins of our universe stood at 30% for 3QFY21 against 4/25% for 3QFY20/2QFY21. An implication of increased capacities and dispatches is an increase in below the line expenses which witnessed an increase of 17/2% YoY/QoQ where the major increase was witnessed in distribution costs which increased by 16pcYoY.” the senior investment analyst added. Decrease in interest rates provided great relief to the sector with finance cost decreasing by 47pc and 8pc in terms of YoY and QoQ respectively to Rs1.4bn while interest cover improved to 12x in 3QFY21 against 0/6x for 3QFY20/2QFY21. Saleem added that for 9MFY21, PAT stands at PAT of Rs22.2bn against LAT of Rs2.6bn while gross margins increased to 25pc against 7pc for 9MFY20 on the back of players engaging in severe price competition during 9MFY20 in the backdrop of North witnessing a significant increase in capacity.