LafargeHolcim Bangladesh valuation report: fair value BDT 18.1–41.8 (Oct 2026)

Investment case: aggregates and the Meghalaya quarry carry LHB while cement margins fall; fair value Tk 18-42

LafargeHolcim Bangladesh PLC (DSE: LHB) is the only integrated cement maker in Bangladesh: it mines limestone at its own quarry in Meghalaya, India, carries it 17 km over a cross-border conveyor to a clinker kiln at Chhatak, Sunamganj, and grinds cement there and at Meghnaghat (two units) and Mongla [1 p.63]. It also sells crushed limestone aggregates, a business that did not exist before 2021 and now earns more than cement. In 2025 aggregates made Tk 3,422m of operating profit on Tk 6,433m of revenue, against Tk 3,130m from Tk 22,881m of clinker and cement [1 p.72]. In January-September 2026 the gap widened to Tk 2,830m versus Tk 668m, and the cement segment lost Tk 84m in the third quarter [2 p.8].

The reason is cost, not volume. Cement sales reached a record ~2,831 kt in 2025 [1 p.22], and 9M 2026 grey-cement revenue still grew 3.8% [2 p.16]. But imported clinker rose from about US$43 to about US$53 a tonne in spring 2026 on Middle East freight, according to LHB's CEO in The Daily Star [10] and the BCMA president, as reported by TBS [11]; grid power rose 16.68% from June 2026 [12] [13]. Consolidated EPS for 9M 2026 fell to Tk 2.41 from Tk 3.06, and operating cash flow was Tk -2,907m as LHB paid down supplier credit [2 p.3] [2 p.6].

Our forecast has EPS of Tk 3.27 in FY2026F and Tk 3.47 in FY2027F (2025: Tk 4.40), with aggregates at about 80% of operating profit. The fair-value range is Tk 18-42 with a base of Tk 30 (probability-weighted Tk 30.1), from EV/EBITDA, a DCF and dividend yield. Sum of the parts does not apply: LUMPL, the Indian quarry company, sells almost all its output to LHB and has no value apart from the plant it feeds, so it is valued inside consolidated earnings.

One kiln, three grinding plants and an Indian quarry: own clinker covers about 70% of LHB's needs

Plants and capacity. Installed capacity is 4,191 kt of grey cement, 1,289 kt of clinker and about 1,200 kt of aggregates. In 2025 LHB produced 2,817 kt of cement (67% utilisation), 1,348 kt of clinker (105%) and 2,021 kt of aggregates [1 p.96]. The Surma plant at Chhatak made 1.14 mt of cement and 1.35 mt of clinker; Meghnaghat 1 and 2 and Mongla ground 1.677 mt [1 p.19] [1 p.20]. At a clinker factor of about 0.68 (our labelled assumption; not disclosed), 2,831 kt of cement needs ~1.9 mt of clinker, so the kiln covers about 70% and LHB bought ~570 kt, costing Tk 3,006m in 2025 (Tk 1,998m in 2024) [1 p.73].

The Meghalaya quarry and supply risk. Lafarge Umiam Mining Private Limited (LUMPL), 100% owned, mines limestone and shale at Nongtrai and Shella in the East Khasi Hills and sends 100% of output to Chhatak by the 17-km conveyor [1 p.63]. It exported 4.238 mt in 2025 (+13.5%) and targets 4.90 mt for 2026 [1 p.20]. LUMPL earned INR 1,175m after tax on INR 3,779m revenue in 2025 [1 p.102]; consolidated profit was Tk 5,108m against Tk 4,650m for LHB alone [1 p.96]. LUMPL is significant as a supply risk rather than as a separate value: its revenue is LHB's limestone cost. The board names cross-border sourcing as a key risk: 'any disruption in supply may interrupt the plant operation in Bangladesh' [1 p.29]. It has happened before: LHB invoked force majeure under its gas contract after 'clinker production stopped due to its Indian subsidiary's forest clearance issue' [2 p.8]. LUMPL also carries Indian service-tax and income-tax disputes of a few crore rupees [1 p.72].

Aggregates. LHB began selling crushed limestone aggregates in 2021. The industries ministry halted the business in September 2021 over an unapproved crushing site and allowed it back at the end of March 2022, as reported by The Business Standard [16]. Since then volume rose from 1,289 kt (2023) to 2,021 kt (2025) at a steady ~Tk 3,180/t, and the segment's operating profit per tonne reached Tk 1,693 [1 p.72]. It is a local substitute for imported stone, which helps LHB's pricing.

Subsidiaries. LUMPL (100%) and Lum Mawshun Minerals (74%, dormant since it transferred its mining rights to LUMPL) [1 p.63]. Holcim Cement Bangladesh is no longer a subsidiary: it was amalgamated into LHB in 2019 [1 p.3].

Parents. Surma Holding B.V. owns 58.87%; it is a Netherlands joint venture owned equally by Holcim (through Lafarge S.A.) and Cementos Molins (Cemolins Internacional SLU). Islam Cement holds 2.75%, Sinha Fashions 1.73% and the public 36.65% [1 p.30]. Sinha Fashions sold 3.0m shares in July 2025 [5]. LHB pays the parent side a general assistance fee and a trademark royalty of Tk 514m each in 2025 (3.5% of revenue) [1 p.74], and owed Tk 2,159m on trademark licence and other balances at year end [1 p.75]. There has been no rights issue since 2011 [1 p.29] and no bonus shares in the last 24 months [5].

Aggregates: 2,021 kt at Tk 1,693/t operating profit made 52% of 2025 profit and 81% in 9M 2026

What it is. LHB crushes limestone and shale from its Meghalaya quarry at Chhatak and sells it as construction aggregates (stone chips for concrete, roads and precast). It started in January 2021; the industries ministry stopped it in September 2021 over an unapproved crushing site and let it resume at the end of March 2022, as reported by The Business Standard [16]. The company calls it an import substitute that saves foreign currency [1 p.3].

Volumes and price. Production rose from 1,289 kt (2023) to 1,627 kt (2024) and 2,021 kt (2025), well above the ~1,200 kt nameplate [1 p.96]; the directors put 2025 volume growth at about 25% 'through business optimization' [1 p.20]. Revenue per tonne was flat at Tk 3,181 (2024) and Tk 3,183 (2025) (revenue / production; sales tonnes are not disclosed). Aggregates revenue rose 15.1% to Tk 5,424m in 9M 2026 [2 p.16]. Logistics changes ('modality changes ... to facilitate maximum customer pickup') opened about 91,000 t of sales that were previously out of reach [1 p.23], and new, more resilient crushers were scheduled from January 2026 [1 p.20].

Customers. LHB does not split aggregates customers. Group-wide, no customer is 10% or more of revenue [1 p.73] and the company reaches more than 8,000 customers [1 p.22]; the 'customer pickup' model suggests traders and project buyers collecting at the plant (our reading: the filings give no customer split).

Why it now earns most of the profit. Three reasons, all from the filings. (1) The raw material is LHB's own: limestone is a group cost (Tk 3,323m in 2025, about Tk 986 per tonne of clinker plus aggregates) with no import price or FX in it [1 p.73]. (2) The segment is light on capital: Tk 1,142m of segment assets against Tk 30,717m for clinker and cement, so Tk 3,422m of operating profit is a return of about three times its assets [1 p.73]. (3) Cement margins collapsed: the cement segment's 9M operating profit fell from Tk 1,840m to Tk 668m while aggregates rose from Tk 2,456m to Tk 2,830m [2 p.8]. Our forecast keeps aggregates at Tk 1,700/t and growing 12%, 8%, 6%, 5% a year, so they stay about 80% of operating profit; the risk is concentration, because the same quarry feeds both businesses.

The Meghalaya quarry: LUMPL earned INR 1,175m in 2025 and pays INR 1,235m a year in royalty, SPV levy and land rent

The asset. LUMPL operates a 100-hectare limestone mine at Nongtrai in Meghalaya, crushes the stone and sends 100% of output to Chhatak over the 17-km elevated conveyor [1 p.19]. Exports to Bangladesh were 2.543, 3.060, 3.543, 3.733 and 4.238 mt from 2021 to 2025, and the 2026 target is 4.90 mt [1 p.20]. The Indian Bureau of Mines has rated the mine five-star for seven years running [1 p.20]. Lum Mawshun Minerals (74%) held the land and mining rights and transferred them to LUMPL; it has had no business since [1 p.63].

The forest-clearance stoppage. The quarry's licence to operate rests on Indian forest and environment approvals. Clinker production at Chhatak once stopped 'due to its Indian subsidiary's forest clearance issue'; LHB later invoked force majeure under its gas contract for that period, a claim (Tk 801m) it won in arbitration in 2015 and which JGTDS is still appealing [2 p.8]. Mining now runs under conditions set by India's environment ministry in line with Supreme Court of India orders of 12-Apr-2010 and a judgment of 6-Jul-2011, including a payment of INR 90 per tonne of limestone to a special purpose vehicle for health, education, irrigation and farming in the area within 50 km of the mine [1 p.112]. The board still lists cross-border supply as a principal risk [1 p.29].

Licence terms. The filings say quarry development costs are amortised 'over the mining lease rights period' and the site-restoration provision is based 'on the tenure of the current mining lease' [1 p.112], but they do not give the lease expiry date (gap). LUMPL's 2025 costs show what the licence costs each year: royalty and cess INR 701m, the SPV contribution INR 380m and lease rent for surface rights INR 154m, about INR 1,235m in total, plus a bank guarantee of INR 37m to the Indian Bureau of Mines for mine closure [1 p.112] [1 p.72].

LUMPL's own numbers. Revenue from operations INR 3,779m (2024: INR 3,434m), profit before tax INR 1,561m (INR 1,285m), profit after tax INR 1,175m (INR 911m), cash INR 761m and receivables INR 1,534m, almost all from LHB [1 p.101] [1 p.102]. It has no borrowings [1 p.100]. Because its revenue is LHB's limestone cost, most of LUMPL's profit is a transfer inside the group and is eliminated or paid up as dividends on consolidation; the Tk 458m gap between consolidated profit (Tk 5,108m) and LHB's separate profit (Tk 4,650m) [1 p.96] is that net effect, not LUMPL's full earnings (INR 1,175m). It carries Indian tax disputes: service tax INR 27.3m net and an income-tax appeal of INR 101m for 2021-22 [1 p.72]. We value LUMPL inside the consolidated numbers and stress-test it in the risk table (half the supply lost).

Bangladesh cement: BCMA puts capacity at 86 mt against 39.75 mt of demand; LHB holds 7.1%

Market size. The Bangladesh Cement Manufacturers Association (BCMA) counts 41 plants with 86.02 mt a year of capacity against 39.75 mt of domestic demand in 2025, up 5.55% [8]. The Financial Express, also citing the industry, put 2025 sales at about 40 mt (+~5%) after three flat years: ~39 mt in 2021, just over 38 mt in 2022 and 2023 and slightly below 38 mt in 2024, with per-capita use of 223 kg [9]. LHB's own annual report gives 38.14 mt for 2023 and 37.65 mt for 2024 [4 p.36]. Utilisation is therefore under 50%, and the industry says demand can grow 8-10% a year [8]; we use 3% for 2026 and 5-6% after (Assumptions).

Share and competitors. LHB sold 2,831 kt in 2025, 7.1% of BCMA demand, after 7.42% in 2023 and 7.18% in 2024 [4 p.36]. The leaders are unlisted: Shah Cement (Abul Khair), Bashundhara, Seven Rings and Fresh (Meghna Group), plus listed Premier Cement, Crown Cement and Heidelberg Materials Bangladesh; nine large firms including these and LHB were reported to hold about 85% of the market [17]. A current company-by-company BCMA share table was not found on our allowed news sources (gap), so we show LHB's share only. Multinationals hold about 20-25% of the country's cement capacity, according to BCMA as reported by The Daily Star [8]. Every competitor is a grinder that imports nearly all its clinker (about 90% of the country's clinker is imported [10]), so LHB's kiln is its structural edge.

Construction demand and the ADP. Cement follows public works and private housing. The 2025 directors' report blames political uncertainty, ~10% inflation and lower public infrastructure spending [1 p.16]; management expected a weak first quarter of 2026 and stabilisation from the second (their view) [1 p.22]. On the public side, ECNEC approved 12 projects totalling Tk 1.69 trillion including the Gabtali-Dasherkandi metro line in September 2026 [14], and steelmakers say they are waiting for government projects to restart [15]. IMED ADP implementation data were not fetched this run (gap); our FY2027-29F demand growth of 5-6% is a labelled judgement that approvals turn into construction.

Prices. Bag prices rose Tk 30-50 in spring 2026 while costs rose Tk 70-80 a bag, as reported by The Daily Star [10]; TBS noted in October 2026 that cement prices were above December 2025 levels [11]. LHB's realisation fell 2.6% in 2025 to Tk 8,032/t (the report says prices fell 3% [1 p.17]) and we assume +2% in 2026.

Utilisation. 39.75 mt of demand on 86.02 mt of capacity is 46.2% industry utilisation in 2025 [8]. LHB ran its grinding mills at 67% and its kiln above 100% [1 p.96]. Even with 6% a year growth, demand would reach only 48.3 mt by 2029F in our model, so spare capacity keeps a lid on price for the forecast period. No new LHB grinding capacity is announced; capex goes to the coal mill, crushers and maintenance [5] [1 p.20].

Pricing environment. Makers raised bag prices by Tk 30-50 in spring 2026 when costs rose Tk 70-80 a bag [10], and BCMA's president said producers had not passed the 30-40% rise in expenses on to retail, as reported by TBS [11]. The 2025 directors' report describes 'persistent price pressure, margin compression, and heightened financial stress across the sector' and says LHB kept brand premiums 'in a highly discounted market' [1 p.22]. Premium products (Supercrete Plus, Holcim Water Protect) grew 48% in 2025 [1 p.16], and the cash-based Direct-to-Retail channel earns higher margins than dealers [1 p.22].

Import duty. Grinders pay customs duty on imported clinker; LHB paid Tk 1,138m of customs duty in 2025 (Tk 847m in 2024) and Tk 7.7bn to the exchequer in all [1 p.29]. The F16 spec records a move from a flat Tk 700/t duty to an ad valorem rate, but we could not confirm the enacted FY2026-27 rate from a Finance Act or SRO in our sources (gap), so the model carries duty inside the purchased-clinker cost per tonne rather than as a separate driver. Any duty rise hits LHB less than grinders because only its imported ~30% of clinker pays it.

Clinker and energy push cement cash cost to Tk 4,534/t in FY2026F from Tk 3,838/t

Cost of sales by item (2025, Tk m): limestone 3,323, other raw and packing materials 3,309, purchased clinker 3,006, power and fuel 2,807, production, maintenance and plant admin 2,602 (ex-D&A), freight and depots 1,744, other incl. inventory movement 2,222, D&A 1,453 [1 p.73]. Gross margin was 30.2% (29.9% in 2024) [1 p.17], down from 36.2% in 2023 [1 p.38].

Clinker import costs and FX. We estimate LHB's purchased clinker at Tk 4,362/t in 2024 and Tk 5,297/t in 2025 (cost / estimated tonnes). Freight shocks in 2026 took CFR clinker from ~US$43 to ~US$53/t [10] [11], so we model +22% in US$ for 2026, flat in 2027, and a 1-3% a year weaker taka (no Bangladesh Bank FX series was fetched: labelled assumption). Because LHB makes ~70% of its clinker itself, a 15% clinker rise costs it Tk 0.27 of FY2027F EPS after 50% price pass-through, because only the imported ~30% is exposed.

Energy and gas. Power and fuel was Tk 991/t of cement in 2025. Gas feeds the kiln and captive power at Chhatak under new 10-year agreements with Jalalabad Gas (JGTDS) from 18-Jan-2026 [5]; a court order requires LHB to keep paying at the old contract rate while the ceiling-price award is enforced [2 p.8]. As reported by The Financial Express, BERC raised gas for new industrial connections from Tk 30 to Tk 40 per cubic metre and for captive power to Tk 42 in April 2025 [18] (the BERC order itself was not retrieved: gap); grid power rose 16.68% from June 2026 [12]. We model +15% per tonne in 2026 and +5% in 2027. A Tk 1.8bn coal mill approved in May 2025 [5] may lower fuel cost later; not in our base.

What this does to the cement tonne. Our FY2027F cement cash cost (clinker, other materials, energy, freight) is Tk 4,865/t against a realisation of Tk 8,439/t; after parent fees, selling cost and other variable lines, an extra tonne adds almost nothing. That is why a 5% fall in demand barely moves FY2027F EPS (+0.05), while a 5% price cut costs Tk 0.70.

Cement cost per tonne. Per tonne of cement sold, the model puts 2025 purchased clinker at Tk 1,062, other materials Tk 1,169, power and fuel Tk 991, freight and depots Tk 616 and parent fees about Tk 282 (fees are charged on all revenue; allocated here at 3.51% of the cement price), against a realisation of Tk 8,032. For FY2026F the same lines are Tk 1,453, 1,262, 1,140, 678 and 288 against Tk 8,193: clinker alone adds about Tk 392/t, energy Tk 149/t, while price adds Tk 161/t. Limestone, fixed plant costs and D&A are shared with aggregates and are not allocated.

Q3 2026 loss bridge. Profit fell from Tk 1,185m in Q3 2025 to Tk 631m in Q3 2026 [2 p.3]. Revenue rose Tk 900m, but gross profit fell Tk 424m as cost of sales rose 28%; general, selling and other costs took Tk 34m more; finance income fell Tk 146m (Q3 2025 included Tk 173m, largely FX related, versus Tk 27m) and finance cost rose Tk 8m; lower tax gave back Tk 57m. By segment, cement went from a Tk 495m profit to a Tk 84m loss, while aggregates rose from Tk 834m to Tk 942m [2 p.8]. The company blames 'elevated energy cost, freight and imported raw material costs despite increased sales' [2 p.9].

Five years: revenue up 43% since 2021 while EPS swung between Tk 3.29 and Tk 5.12

Revenue rose from Tk 20,534m (2021) to Tk 29,314m (2025); profit swung with clinker, FX and tax: Tk 3,882m, 4,445m, 5,942m, 3,819m and 5,108m [1 p.38]. 2023 was the peak (36.2% gross margin); 2024 was hit by an FX loss of Tk 376m and a 28.7% tax rate [1 p.74]. Over 2021-25 EPS averaged Tk 4.0 and ROE about 25%, so our FY2026-27F EPS of Tk 3.27-3.47 and ROE of ~21% sit at the low end of LHB's own record; we do not assume a return to the 2023 peak.

Cash fell from Tk 9.5bn to Tk 2.3bn in nine months as supplier credit shrank by Tk 3.8bn

LHB had no borrowings at December 2025 or September 2026. Cash fell to Tk 2,342m at 30-Sep-2026 from Tk 9,518m: trade payables fell from Tk 17,205m to Tk 13,453m, inventories rose to Tk 5,092m, LHB paid Tk 2,558m of dividends and Tk 1,723m of capex [2 p.2] [2 p.6]. Payables were 307 days of cost of sales in 2025, partly balances due to the parent group [1 p.75]; we assume 230 days from 2026 (bear 190, bull 260). Other current assets include Tk 2,970m paid to Jalalabad Gas under protest, which an arbitration tribunal ordered refunded in 2023; JGTDS has not paid, and a Tk 4,000m bank guarantee from LHB now backs the gas supply [1 p.29] [2 p.7].

Where the cash went (9M 2026). Starting from Tk 9,518m, cash earnings (profit before tax plus D&A and other items) added Tk 4,722m; tax paid took Tk 1,743m; working capital took Tk 5,887m, mainly because trade payables fell Tk 3,752m and inventories rose Tk 1,244m; investing took Tk 1,643m (capex net of interest received); dividends took Tk 2,558m (the 2025 final of Tk 2.20); leases and other items Tk 65m; FX Tk 3m. That leaves Tk 2,342m [2 p.6] [2 p.9]. The working-capital swing is the unwinding of the unusually high supplier credit at December 2025 (307 days), not a sign of stress: LHB still has no borrowings and a AAA rating [5].

Dividend outlook. The board's policy has been to pay out close to all profit [1 p.17], but the 2026 interim fell to Tk 1.00 from Tk 1.80 [5]. With cash of Tk 4,819m at end-2026F in our model and Tk 1,161m of interim dividend to pay in November, we assume 85% payout: DPS Tk 2.78 for 2026 (a final of about Tk 1.78), Tk 2.95 for 2027 and Tk 3.07 for 2028, yields of 5.7%, 6.1% and 6.3% at Tk 48.7. In the bear case (payables at 190 days and weaker margins) a payout near 85% would need short-term borrowing; we expect the board to cut payout instead.

Payout averaged 101% over 2023-25; we cut it to 85%, still a 5.7% yield

Operating cash flow covered profit 1.7x in 2025 (Tk 8,492m vs Tk 5,108m) [1 p.63], but went negative in 9M 2026. Dividends: Tk 5.00 for 2023, Tk 3.80 for 2024 and Tk 4.00 for 2025 (18% interim + 22% final), payouts of 98%, 116% and 91% [1 p.17] [1 p.62]. The board says it declared '100% of the profit' to use retained earnings and spare cash [1 p.17]. For 2026 it cut the interim to Tk 1.00 (record date 12-Nov-2026) [5]. We assume 85% payout, DPS Tk 2.78 for 2026 and Tk 2.95 for 2027. Bangladesh has no bank-style paid-up capital rule for a cement company; dividends can come from current or past profits [1 p.17]. The tax rate was 24.6% in 2025 and 22.9% in 9M 2026 [2 p.8]; WPPF is 5% of the Bangladesh company's profit. Auditors (Nurul Faruk Hasan & Co.) gave a clean opinion; Hoda Vasi Chowdhury & Co. is proposed for 2026 [1 p.31].

Forecast: aggregates growth offsets cement; EPS Tk 3.27 in FY2026F rising to Tk 3.73 by FY2029F

Cement revenue = Bangladesh demand x LHB share x realisation: demand 40.9 mt in 2026F (+3%), share 7.05%, so 2,886 kt (+2%), then +5-6% a year as ECNEC projects reach sites. Realisation +2% in 2026 and +3-4% later, a partial pass-through of clinker and energy. Aggregates +12% in 2026F (9M revenue +15%), then +8%, +6% and +5%, at ~Tk 3,250/t and ~Tk 1,700/t operating profit.

Costs. Purchased clinker grows with cement volume because the kiln stays at ~1,320 kt, so imported tonnes rise from ~568 kt to ~996 kt by 2029F; with US$ clinker +22% in 2026, clinker reaches 19.1% of cost of sales in 2027F. Power and fuel +15%/t in 2026, freight +10%/t, fixed costs +7%. Gross margin falls to 23.0% in 2026F and 20.9% by 2029F. Q4 2026F profit of Tk 1,002m (EPS Tk 0.86) sits between Q3 2026 (Tk 631m) and Q4 2025 (Tk 1,553m). Disclosure: this is calibrated, not an independent result. We set two 2026 inputs so that Q4 lands there: imported clinker +22% in US$ (supported by the reported move from ~US$43 to ~US$53/t) and 'other cost of sales incl. inventory movement' at 9% of revenue against 7.6% in 2025 and 8.7% in 2024. The 9% is a plug chosen so that FY2026F gross margin (23.0%) matches the reported 9M 2026 gross margin of 23.4% (Tk 5,381m on Tk 23,016m [2 p.3]); at 7.6% FY2026F EPS would be higher and Q4 would sit above Q4 2025, which the Q3 run-rate does not support.

Below the line. Parent fees 3.51% of revenue, sales and marketing 2.1%, finance income 2.5% on opening cash, tax 23.5%. Capex Tk 2.3bn in 2026 then Tk 1.6-1.8bn; D&A 8% of opening fixed assets. Our FY2026F EPS of Tk 3.27 compares with Tk 2.41 for 9M 2026 and Tk 4.40 for 2025. This model uses filings to 30-Sep-2026 and will be updated when the 2026 annual report is filed.

Valuation: Tk 18-42 a share; base Tk 30 = 5.0x FY2027F EV/EBITDA

Method. Consolidated valuation, three legs. Under WRITER rule 4e no leg uses the current price, a recent own multiple or the 2022-23 floor years. (1) DCF of free cash flow to the firm, 2027-31, cost of equity 19.2% = 10-year T-bond 9.27% (25-Oct-2026) [7] + beta 1.35 x 7% + 0.5% liquidity; no debt, so WACC = cost of equity; terminal growth 6%; terminal value 58% of EV (50% weight). The 2030-31 margin fades to 21.8%, the average of the model's own EBITDA margins for 2024A-2029F (two high-margin actual years and four forecast years), which assumes clinker and energy costs pass through over a full cycle; FY2029F is 17.5%. Beta is the house rule: two-year weekly returns against DSEX, raw 1.53, Blume-adjusted 1.35 (see the beta paragraph below for why we did not override it). (2) Justified forward EV/EBITDA of 4.53x on FY2027F EBITDA of Tk 6,833m (30%): cash conversion 56.7% (FY2029F EBITDA less tax on EBIT and maintenance capex) x (1 + 6%) / (19.2% - 6%). A long pre-floor own record (2015-21) cannot be built from our filings (gap) and the listed peers are levered or barely profitable, so neither is a usable anchor. The DCF itself implies 5.81x FY2027F EBITDA; the justified multiple is lower because it assumes steady-state margins from 2027 with no recovery. (3) Justified dividend yield of 13.2% (= cost of equity - g, the DCF's own inputs) on FY2027F DPS of Tk 2.95 (20%). Weights: the DCF carries the line-by-line forecast and the margin recovery, so it gets 50%; the two justified legs use the same cost of equity and growth but steady-state cash conversion and payout, so they act as checks on the DCF's fade assumption (30% and 20%).

Result. EV/EBITDA Tk 27.6, DCF Tk 35.1 (with no margin recovery, holding the EBITDA margin at the FY2029F 17.5% in 2030-31, the DCF would be about Tk 29.9: the recovery to 21.8% adds about Tk 5.2 to the DCF leg and about Tk 2.6 to the base), dividend yield Tk 22.3: base Tk 30.3, or 8.7x FY2027F EPS and 1.8x September 2026 NAV, about US$66 of EV per tonne of grinding capacity (at an assumed Tk 123/US$). Our base implies 9.3x FY2026F EPS. At the justified multiple, the market price of Tk 48.7 needs FY2027F EBITDA of about Tk 12,232m, well above 2025's Tk 8,041m: the price assumes both a quick reversal of the 2026 cost shock and a lower cost of equity than ours. Not in the value: the Tk 2,970m JGTDS refund claim (Tk 2.56 a share).

Beta against LHB's own history. We kept the house beta rather than override it. The two-year weekly raw beta is 1.53 (correlation 0.78; Blume-adjusted 1.35); LHB's monthly beta was 1.57 over five years (correlation 0.81), 1.94 from Nov-2021 to Oct-2024 (which includes the floor-price months, when LHB sat at Tk 64.8) and 1.35 over the last two years (beta_monthly.py on chart_bars [6]). The case for a lower beta is real: LHB has no debt, a AAA rating, a 90%+ payout and a multinational parent. But its own price history does not show a beta below 1 in any window we can measure, and the F16 alternative (relevered regional cement peers) is not available in our tools. A beta of 1.0 would lower the cost of equity to about 16.8% and raise all three legs, because the multiples are now derived from the same cost of equity; that is the largest single swing in our range.

Own-history multiples (context only, not used). Excluding the 2022-23 floor-price years, LHB's year-end trailing P/E was 16.4x (2024) and 10.6x (2025), EV/EBITDA 7.4x and 5.6x, and dividend yield 7.1% and 8.6% (Ratios sheet). Two years is too short a record and both are trailing, so under rule 4e we do not apply them to forward earnings. Today's 14.9x FY2026F P/E is on earnings 26% below 2025; our base implies 9.3x.

Peers. The listed peers are grinders with different years and balance sheets, so the comparison is a sanity check, not a valuation leg. Heidelberg Materials Bangladesh (December year) earned Tk 200.6m in 2025, EPS Tk 3.55 (Tk 8.17 in 2024) [19 p.11]; Premier Cement (June year) earned Tk 136.5m in FY2025 (Tk 1.29 a share on 105.45m shares) on net assets of Tk 64.50 and carries Tk 25.3bn of fixed-rate borrowings [20 p.188] [20 p.185]; Crown Cement earned Tk 671.6m in FY2025 (Tk 4.52 a share, our derivation on 148.5m shares, not a reported EPS) with finance cost of Tk 1,763m [21 p.56]. LHB is the only one with net cash, its own clinker and an aggregates business, which is why it trades at about 3x book while Premier trades below book.

Risks: losing half the Meghalaya supply would cut fair value by ~Tk 27; clinker +15% costs Tk 1.5

Each risk below is a driver change in the model with everything else at base (Sensitivity sheet). Meghalaya quarry (supply line: own clinker and aggregates volume, purchased clinker): a lasting halving of LUMPL supply, with no mitigation assumed (no extra clinker imports at a discount, no insurance, no price response), turns FY2027F EPS to Tk -0.39 and fair value to Tk 3; low probability, very high impact, and it has happened before. Cement price war (realisation): -5% costs Tk 0.70 of EPS. Energy and gas (power and fuel/t): if the new JGTDS tariff is applied in full, +15% costs Tk 0.34. Clinker and FX (purchased clinker Tk/t): see the grid. Supplier credit (payables): 150 days lowers value by Tk 1.7 through working capital. Demand/ADP (cement volume): small at today's margins (+0.05). Gas dispute (other current assets): losing the Tk 2,970m claim would cut NAV by Tk 2.56 a share. Parent fees (G&A): already 3.5% of revenue; an increase would come straight off profit.

Next six months: Q4 results and dividend (Mar-2027), clinker prices, the JGTDS case

• Interim dividend Tk 1.00, record date 12-Nov-2026 (DSE).
• 2026 annual results and final dividend, about March 2027: our FY2026F EPS is Tk 3.27.
• Clinker CFR and freight: a fall back to ~US$45/t would lift our FY2027F EPS by about Tk 0.3.
• Execution case and review petition with Jalalabad Gas; any refund of Tk 2,970m.
• Aggregates volumes after the new crushers; LUMPL's 4.90 mt limestone target.
• Missing from this report (gaps): investor/analyst call slides and transcripts (not in our corpus), IMED ADP data, a current BCMA market-share table, Bangladesh Bank exchange-rate series, peers' 2025 filings.

FAQ

What is LafargeHolcim Bangladesh's fair value?

Our range is Tk 18-42 a share with a base of Tk 30, from EV/EBITDA, a DCF and dividend yield, using filings to 30-Sep-2026.

Why did LHB's profit fall in 2026?

Imported clinker rose from about US$43 to US$53 a tonne, power tariffs rose 16.68% from June 2026 and freight rose, while weak demand limited price increases. 9M 2026 EPS was Tk 2.41 vs Tk 3.06.

How important is the aggregates business?

In 9M 2026 aggregates earned Tk 2,830m of operating profit against Tk 668m for clinker and cement.

Where does LHB's limestone come from?

From its wholly owned Indian subsidiary Lafarge Umiam Mining in Meghalaya, by a 17-km conveyor to Chhatak. A supply disruption is the largest single risk.

Who owns LHB?

Surma Holding B.V., a 50/50 joint venture of Holcim and Cementos Molins, owns 58.87%.

What dividend does LHB pay?

Tk 4.00 for 2025 and an interim Tk 1.00 for 2026. We forecast Tk 2.78 for 2026 at 85% payout.

Sources

1. LafargeHolcim Bangladesh PLC Annual Report 2025 (consolidated and separate statements, LUMPL statements; corpus key LHB_ANNUAL_2025, PDF page numbers) · link · accessed 2026-10-31
2. LHB un-audited interim financial statements, 9 months to 30-Sep-2026 (Q3 2026) · link · accessed 2026-10-31
3. LHB un-audited interim financial statements, half year to 30-Jun-2026 (Q2 2026) · link · accessed 2026-10-31
4. LafargeHolcim Bangladesh PLC Annual Report 2024 (industry volume and market share, p.36) · link · accessed 2026-10-31
5. DSE news archive for LHB, Nov-2024 to Oct-2026 (interim dividend Tk 1.00 25-Oct-2026; final dividend 12-Mar-2026; coal mill approval 8-May-2025; gas agreements 25-Jun-2025; sponsor sale Jul-2025; CRISL AAA 16-Mar-2026) · link · accessed 2026-10-31
6. AnalystBro market data: DSE daily, weekly and monthly bars for LHB and DSEX to 29-Oct-2026 · link · accessed 2026-10-31
7. Bangladesh Bank treasury auction page (10-year bond cut-off 9.2680%, 25-Oct-2026) and Scheduled Banks Statistics Apr-Jun 2026, Table-102 (lending rate 12.13%) · link · accessed 2026-10-31
8. The Daily Star, 'Bangladesh's cement producers reject US overcapacity claims' (BCMA: 41 plants, 86.02 mt capacity, 39.75 mt demand 2025), 17 Mar 2026 · link · accessed 2026-10-31
9. The Financial Express, 'Cement sector rebounds after 3-year slump', 11 Mar 2026 · link · accessed 2026-10-31
10. The Daily Star, 'Cement makers under strain as war drives input costs', 29 Apr 2026 · link · accessed 2026-10-31
11. The Business Standard, 'Why building materials remain vulnerable to price shocks', 29 Oct 2026 · link · accessed 2026-10-31
12. Prothom Alo English, 'Power tariff rises by 16.68pc from June', 3 Jun 2026 · link · accessed 2026-10-31
13. The Financial Express, 'Electricity prices hiked across the board', 4 Jun 2026 · link · accessed 2026-10-31
14. Prothom Alo English, 'ECNEC approves Gabtali-Dasherkandi metro rail project, 11 others worth Tk 1.69 trillion', 16 Sep 2026 · link · accessed 2026-10-31
15. The Daily Star, 'Steelmakers pin hopes on revival of govt projects', 11 Oct 2026 · link · accessed 2026-10-31
16. The Business Standard, 'LafargeHolcim revenue falls due to aggregate business dispute', 25 Apr 2022 · link · accessed 2026-10-31
17. The Daily Star, 'Competition choking small cement makers' (market concentration) · link · accessed 2026-10-31
18. The Financial Express, 'Gas prices for new industries, captive power plants raised by 33pc', Apr 2025 · link · accessed 2026-10-31
19. Heidelberg Materials Bangladesh PLC audited financial statements 2025 (statement of profit or loss) · link · accessed 2026-10-31
20. Premier Cement Mills PLC Annual Report 2024-25, consolidated notes · link · accessed 2026-10-31
21. Crown Cement PLC Annual Report 2024-25 (economic value added statement) · link · accessed 2026-10-31
22. AnalystBro model for LHB (model.xlsx, the workbook below) · link · accessed 2026-10-31