BUA Cement rally lifts valuation as investors bet on growth in 2026

BUA Cement Plc’s strong share price rally has continued into 2026, pushing the company’s valuation higher, suggesting that investors are betting on its growth prospects.

The stock closed 2025 at N178.50 but has since climbed to N270, reflecting a gain of 51.3% so far this year.

The rally followed a strong performance in the previous year. In 2025, BUA Cement’s share price rose about 92%, marking a sharp turnaround from the 4.25% decline recorded in 2024.

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As the share price moved higher, the company’s valuation also expanded. Based on trailing twelve-month earnings per share of N10.51, investors are now paying about 25.7 times earnings, compared with about 19.17 times earnings at the end of 2025.

In simple terms, the market has moved from paying about N19 for every N1 of BUA Cement’s earnings to N26.

The rally could signal rising investor confidence in the company’s earnings and future growth, but it may also be influenced by trading dynamics in the market.

To better understand the move in the stock price, it is useful to examine both scenarios.

**Fundamentals **

BUA Cement has delivered strong financial growth over the past few years.

• Revenue rose from about N257 billion in 2021 to N1.18 trillion in 2025, representing a compound annual growth rate of about 46%.
• The company’s profitability also improved sharply in 2025, with profit after tax rising to about N356 billion and earnings per share increasing to N10.51.
• Margins also strengthened significantly during the year. Gross margin improved to 51.2%, while EBITDA margin rose to 46.6%.

Management attributed the improvement to tighter cost management, operational efficiency, and stronger engagement across its supply chain.

The company has also rewarded shareholders with higher dividends.

• Over the past five years, dividend payments have grown at a compound annual rate of about 40%,

• For the 2025 financial year, it increased the dividend per share to N10 compared to N2.05 for the 2024 financial year. This is encouraging for income-oriented investors.

**Market trading structure. **

The company’s shareholding structure also appears to influence how the stock trades.

Major shareholders control over 95% of the company, leaving a free float of about 2.32% of total shares available for trading.

This relatively small supply of tradable shares means that even moderate buying pressure can push the stock price higher.

• Trading data reflects this dynamic. Over the past three months, BUA Cement traded about 71.4 million shares valued at roughly N13.9 billion, ranking the stock 86th on the NGX in trading activity.
• While the volumes are modest compared with some large-cap peers, the tight free float means relatively small shifts in demand can have a noticeable impact on the share price.

Notwithstanding this, the rally cannot be explained by market structure alone. The company’s strong earnings growth, improving margins, rising dividend payments, and positive outlook appear to be strengthening its investment case.

In other words, while the limited free float may amplify price movements, the company’s fundamentals, earnings growth, dividend expansion and ongoing capacity upgrades, provide the underlying support for investor optimism.

**Outlook **

Looking ahead, management expects growth to continue in 2016. The company stated that

• It expanded its logistics network in 2025; adding 500 bulk cement tankers and resumed exports to Niger and Burkina Faso, strengthening its reach in regional markets.
• At the same time, major projects such as Ososo Line-1 and the Sokoto regasification plant are progressing on schedule.
• Once completed, these projects are expected to increase the company’s installed capacity to about 20 million metric tonnes per annum, positioning it to meet rising local and regional demand.

**Investment case **

BUA Cement’s revenue growth has been supported by a combination of pricing and expanding production capacity.

• The company currently operates at about 17 million tonnes per annum, which helped generate N1.18 trillion in revenue in 2025.

• With ongoing projects expected to raise installed capacity to 20 million tonnes per annum, the company could potentially generate over N1.3 trillion in annual revenue, assuming stable pricing and strong utilisation rates.

This expansion, combined with cost efficiency and improving margins, could help the company sustain its earnings growth into 2026 and make the stock an investment case.

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