Ghandhara Automobiles Limited (GAL) is a public listed entity with a free float of ~36% shares as of Sep'25. It got listed on Karachi Stock Exchange (now 'Pakistan Stock Exchange') in 1992.

Ghandhara Automobiles Limited was incorporated on August 8, 1981 as a private limited entity and was subsequently converted into a public limited company on May 24, 1992. The Company is a subsidiary of "Bibojee Services (Private) Limited".

Ghandhara Automobiles Limited (GAL) operates as an automobile assembler and manufacturer with its production facility located at Port Qasim, Karachi. The plant is equipped with modern infrastructure, including a cab metal shop, paint shop, trimming shop, chassis drilling, frame riveting, main assembly lines, engine assembly and testing, body shop, and axle assembly, enabling end-to-end vehicle assembly. The facility covers a total area of over 100,000 square meters with a built-up area exceeding 34,000 square meters, and it has an installed capacity of producing around 4,800 trucks, buses, and pickups, along with 6,000 vehicles at the car plant annually on a single-shift basis. GAL assembles and markets a diversified range of vehicles, including JAC trucks and Dongfeng/Renault commercial vehicles, while also maintaining import and distribution arrangements. The operational setup provides GAL with a moderate scale of production, while its reliance on imported completely knocked down (CKD) kits exposes it to supply chain and regulatory risks. Nonetheless, the diversified product base within the commercial vehicle segment and continuous upgradation of facilities underpin the Company’s operational profile.

Bibojee Services (Private) Limited directly owns ~56.0% stake in the Company. Other shareholders include Banks (~1.29%), and Insurance Companies (~0.07%), while the remaining are held by DFIs, NBFIs, the general public & others.

Bibojee Group of Companies represents a family with a history of entrepreneurship spanning over four decades. It operates through the holding company "Bibojee Services (Private) Limited". This provides a formal structure to the group and a platform for relatively smooth succession matters amongst family members.

Bibojee is the parent company of the Bibojee Group of Companies with interests in various industries, including automobiles, textiles, insurance, construction, and tyre manufacturing. Bibojee group's understanding of the business is strong.

With strategic investments across the Textile, Insurance, Automobile, and Construction sectors, this business group reflects strong financial strength. Fortified by robust risk management strategies, ensuring sustained growth across varied market conditions.

The board maintains separate roles for the Chairman and the CEO, comprising ten members: one executive director, six non-executive directors, and three independent directors. This balanced mix of independent and executive directors equips the board to ensure comprehensive decision-making and robust governance practices.

The Board members are professionals with diverse experience across various sectors. Lt. Gen. (Retd.) Ali Kuli Khan Khattak, the Chairman, brings specialized knowledge from the Auto & Allied sector. Each board member offers a unique blend of seasoned expertise and skills, collectively ensuring robust governance.

The board, comprised of skilled and diverse individuals, conducts frequent meetings to ensure clear communication and responsiveness to stakeholders. Its effectiveness is demonstrated through its strategic vision, diverse expertise, and rigorous governance practices. Minutes are meticulously documented following each meeting, facilitating seamless follow-up actions.

An effective Internal Audit department reporting to the Audit Committee is in place that ensures transparency & compliance, identifies risks, and provides valuable insights to the management. M/s. ShineWing Hameed Chaudhari & Company, a QCR rated firm, has expressed unmodified opinion on the financial statements of the Company for financial period ending June 30, 2025.

The Company's organizational structure is divided into functional departments, with HODs reporting to the CEO. Major departments include Finance, HR & Admin, Quality Control, Sales & Marketing, and Plant Operations. This well-balanced structure allows for efficient communication and collaboration within different departments.

The Company's management team consists of highly qualified professionals with a wide range of skills and diverse experience. Mr. Ahmad Kuli Khan Khattak, the CEO, has over 15 years of experience and is supported by an adept management team. Mr. Faisal, the CFO, brings over 11 years of experience and a diverse skill set, providing exceptional financial leadership and strategic guidance. Clearly defined roles and responsibilities further enhance the effectiveness of the Company's structure.

Every department head is responsible for managing the affairs of their departments. Clearly defined rules & responsibilities, operational agility, and strategic foresight of Company's management team add to the effectiveness of the Company's structure.

GAL has implemented the Sidat Hyder Financial Business software package, supported by a regular update and technical support agreement with the vendor. These technological advancements enable GIL to remain competitive and achieve its strategic goals in a dynamic business environment.

The Company's structure comprises various departments, each with an effective Internal Control System. A robust MIS supports management's reporting needs and strengthens the control environment, with built-in controls to avoid conflicts of interest.

The trucks and buses industry in Pakistan is closely tied to overall macroeconomic activity, logistics demand, and infrastructure development. The sector has historically exhibited cyclical patterns: after total sales volumes of ~3,647 units in FY20, the industry rebounded strongly in FY21 and FY22 with growth of 19.2% and 49.5%, respectively, supported by post-pandemic resumption of industrial activity and transportation demand. However, the momentum could not be sustained, as volumes contracted sharply by 41.0% in FY23 and further by 31.2% in FY24, reflecting the combined impact of high inflation, policy rate hikes, exchange rate volatility, and constrained access to vehicle financing. In the ongoing fiscal year (FY25, up to June 2025), the industry has demonstrated a strong rebound, with sales volumes rising to ~5,232 units, reflecting an impressive 98.1% year-on-year growth. This recovery is underpinned by improved liquidity in the transport sector, partial stability in the exchange rate, and some normalization of supply chain disruptions. Nevertheless, the sustainability of this growth remains uncertain, as the industry continues to face structural vulnerabilities. A key challenge is its heavy reliance on imported Completely Knocked Down (CKD) kits, which exposes assemblers to foreign exchange risk, import restrictions, and global supply chain shocks. On the policy front, two developments are critical for shaping future dynamics. First, the financing cap of PKR 3 million per borrower—still applied by commercial banks—continues to constrain demand in the mid-to-heavy vehicle category, limiting fleet expansion by logistics operators. Second, the Budget 2025–26 has introduced major reforms to the import regime: commercial imports of used vehicles up to five years old will be permitted from September 2025, with age limits fully removed by July 2026, subject to quality checks. Additionally, a 40% regulatory duty on such imports will gradually reduce until its removal by July 2029. While these reforms are expected to expand consumer choice and intensify competition, they may also put pressure on the market share and margins of local assemblers in the medium term. Overall, despite a promising rebound in FY25, the trucks and buses industry remains highly sensitive to macroeconomic shifts, policy frameworks, and external shocks. The trajectory ahead will largely depend on the pace of economic stabilization, financing availability, and the industry’s ability to adapt to a more liberalized import environment.

Ghandhara Automobiles Limited (GAL) holds a distinctive position in Pakistan’s commercial vehicle industry through its collaboration with Anhui Jianghuai Automobile Co. Ltd. (JAC Motors), China, a globally renowned manufacturer. GAL’s portfolio comprises a range of Chinese-origin JAC trucks, offering light, medium, and heavy-duty commercial vehicles designed to meet the evolving transportation and logistics needs of the domestic market. Over the years, GAL has built a stable and growing market presence, with its truck market share fluctuating between ~2.4% in FY20 and 7.1% in FY21, and currently standing at ~4.5% in FY25 (till June 2025), according to Pakistan Automotive Manufacturers Association (PAMA) data. This reflects its ability to cater to fleet operators, logistics companies, and small-to-medium enterprises seeking cost-effective, durable, and fuel-efficient vehicles. GAL’s nationwide 3S (Sales, Service, Spare Parts) network strengthens customer retention and enhances its brand presence across Pakistan. Looking ahead, the National Trucking Policy 2018 (NTP-2018) plays a pivotal role in shaping the future of the logistics and transportation industry. The policy emphasizes fleet modernization, axle-load management, safety standards, and emission compliance (Euro-II and above). These measures are expected to stimulate demand for modern, high-capacity trucks that reduce logistics costs and improve operational efficiency. GAL is strategically positioned to align its JAC product offerings with these regulatory objectives, enabling it to capitalize on the policy-driven demand for fleet renewal.

Due to the highly cyclical nature of the auto industry and persistent macroeconomic challenges impacting the fragile domestic economy, GAL’s topline performance has exhibited volatility. For FY25, consolidated revenue stood at PKR ~34,512mln, reflecting the company’s strong rebound in volumes and improved product mix that emphasized higher-value models. Within this, revenue for 9MFY25 was recorded at PKR ~15,308mln, significantly higher than PKR ~9,413mln in FY24. On the profitability front, GAL posted a net profit of PKR ~4,096mln in FY25, while earnings for 9MFY25 reached PKR ~2,274mln, compared to PKR ~365mln in FY24. This turnaround was supported by operating leverage from increased sales volumes, disciplined cost management, and the introduction of premium product offerings, which collectively enhanced margins and overall financial performance.

The Company’s margins strengthened considerably in FY25, underpinned by enhanced operational efficiency, disciplined cost controls, and a strategic tilt towards a more favorable product mix. The gross margin ratio for FY25 stood at ~18.4%, reflecting a substantial improvement over ~12.0% in FY24, with 9MFY25 even higher at ~19.8% due to stronger interim volumes and premium offerings. Operating margins also showed notable growth, reaching ~15.6% in FY25, compared to ~6.7% in FY24, while 9MFY25 had peaked at ~16.6%, supported by economies of scale and improved operational leverage. Similarly, the net profit margin improved to ~11.9% in FY25, a significant uplift from ~3.9% in FY24, with 9MFY25 recording ~14.9% on the back of strong topline growth, optimized expense management, and reduced finance costs. These improvements, though partially offset by macroeconomic pressures such as currency volatility and inflationary trends, underscore GAL’s strengthened profitability profile.

Although the Company generally prepares financial projections, developing prudent projections that align with industry dynamics and market trends is essential to navigate market fluctuations, and ensure long-term resilience.

The Company’s working capital requirements primarily arise from trade payables and are funded through a combination of internal cash generation and short-term borrowings. In FY25, inventory days improved to ~74 days, compared to ~112 days in FY24, reflecting smoother supply chain flows and better inventory management. For 9MFY25, however, inventory days had temporarily spiked to ~133 days due to import congestion in 1QFY25, which caused delays in the clearance of raw materials and components. Trade receivable days also declined meaningfully, reaching ~16 days in FY25 versus ~51 days in FY24, with 9MFY25 at ~26 days, supported by tighter credit controls, enhanced collection mechanisms, and a deliberate shift towards cash-based sales. As a result, net working capital days reduced to ~62 days in FY25, compared to ~119 days in FY24, with 9MFY25 even lower at ~16 days, underscoring accelerated receivable collections and supplier credit optimization during the interim period. Overall, the improvement in working capital metrics highlights the Company’s resilience and adaptability in navigating external challenges while maintaining operational continuity in a difficult macroeconomic environment.

The Company’s cash flow coverages strengthened notably in FY25, supported by robust operating performance and improved working capital efficiency. Free Cash Flow from Operations (FCFO) rose to PKR ~4,140mln in FY25, compared to PKR ~712mln in FY24, while 9MFY25 had stood at PKR ~2,154mln, reflecting sustained momentum during the year. Consequently, the interest coverage ratio improved sharply to ~23.5x in FY25, versus ~1.6x in FY24, with 9MFY25 at ~12.1x, highlighting the Company’s enhanced capacity to comfortably meet finance costs from operational earnings. Similarly, the core debt coverage ratio strengthened to ~10.3x in FY25, compared to ~0.9x in FY24, with 9MFY25 recorded at ~6.0x, underscoring a marked improvement in debt-servicing ability. Overall, these developments demonstrate GAL’s strengthened financial flexibility and liquidity profile, positioning it favorably to withstand external shocks while maintaining operational continuity amidst a challenging macroeconomic backdrop.

The Company maintains a moderately leveraged capital structure, reflecting prudent financial management and a conscious effort to reduce reliance on external financing. As of FY25, total debt stood at PKR ~880mln, down from PKR ~2,377mln in FY24, supported by sustained deleveraging efforts. Within this, long-term borrowings amounted to PKR ~553mln in FY25, highlighting a preference for more stable funding sources and lower refinancing risk. Importantly, the debt profile now comprises entirely long-term borrowings, with no short-term debt outstanding. During 9MFY25, total debt had been recorded at PKR ~936mln, with PKR ~696mln in long-term borrowings, following the repayment of all short-term debt. Supported by stronger earnings and cash flow generation, the gearing ratio improved to ~5.6% in FY25, compared to ~18.1% in FY24, with 9MFY25 at ~6.7%. This notable decline in leverage underscores GAL’s strategic focus on deleveraging, strengthening its equity base, and enhancing financial flexibility, thereby positioning the Company to better withstand macroeconomic volatility while preserving headroom for future growth and expansion initiatives.