Ghandhara Industries Limited (hereinafter referred as 'GIL' or 'the Company') is a public listed entity with a free float of ~35% as of Sep'25. The corporate office of the Company is in F-3, Hub Chawki Road, S.I.T.E. area, Karachi.

The Company was originally established in 1963 by General Motors Overseas Distribution Company and was subsequently acquired by Late Lt. General (R) Habibullah Khan Khattak. It was nationalized in 1972 and renamed National Motors Limited. In 1992, following privatization, Lt. General (R) Habibullah Khan Khattak regained ownership and reinstated the name “Ghandhara Industries Limited.”

Ghandhara Industries Limited (GIL) operates as the assembler and progressive manufacturer for the Isuzu truck, bus, and pickups in Pakistan, employing state-of-the-art facilities based in the S.I.T.E., Karachi assembly plant. Its comprehensive product portfolio encompasses a wide range of light-duty (N-Series), medium/high-duty (F-Series and C-Series) trucks, along with D-Max pickups, various buses, and a sophisticated vehicle body fabrication line offering customized solutions such as bus bodies, water bowsers, mobile workshops, troop carriers, and more. Operating as a one-stop solution provider, GIL ensures strong after-sales support through its extensive 3S dealership network (Sales, Service, and Spares) established across major Pakistani cities. The company’s strategic alliance with the globally renowned Isuzu brand underpins its competitive strength, enabling GIL to deliver products known for their reliability, fuel efficiency, and payload capabilities, critical attributes in the demanding transport sector. GIL places strong emphasis on leveraging technological enhancements to boost operational efficiency and quality.

Majority stake of the entity is held by Bibojee Group of Companies, whereas Bibojee Services (Private) Limited directly owns ~39% shares and Ghandhara Automobiles Limited has ~19%. Other shares are held by Corporates, Financial Institutions, Banks, and individual members.

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, under whose umbrella come automobile companies, textile, insurance, construction, and tyre manufacturing concerns. 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 nine members: two executive directors, four non-executive directors, and three independent directors. Comprising a balanced mix of independent and executive directors, the board is well-equipped to ensure comprehensive decision-making and robust governance practices.

The Board members are professionals with experience in managing business affairs in different sectors. Lt. Gen. (Retd.) Ali Kuli Khan Khattak, the Chairman of the Board, has diversified experience in the automotive and allied sectors, bringing specialized and comprehensive experience and knowledge to the board. Each board member brings an impressive blend of seasoned expertise and diverse skill sets, which collectively ensure 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 an unqualified audit opinion on the financial statements of the Company for the financial year ended June 30th, 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 Material Management. This well-balanced structure allows for efficient communication and collaboration within different departments.

Management of the Company comprises qualified professionals with a wide range of skills and diversified experience. Mr. Ahmad Kuli Khan Khattak is the CEO of the Company. He has an overall experience of over 30 years and he is assisted by an able management team. Muhammad Aamir, the CFO of the Company, brings over 22 years of experience and a diverse skill set, ensuring exceptional financial leadership and strategic guidance. Clearly defined rules & responsibilities in an organization add to the effectiveness of the Company's structure.

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

GIL has an integrated ERP business software package that unifies all aspects of its operations. This software streamlines processes, enhances data accuracy, and delivers real-time insights, empowering informed decision-making. These technological advancements position GIL to remain competitive and achieve its strategic goals in a dynamic business environment.

The Company's corporate structure is organized into various departments, each with its own effective Internal Control System. A robust MIS supports management's reporting needs and strengthens the overall control environment. Built-in controls are in place to ensure that conflicts of interest are avoided.

The trucks and buses industry in Pakistan remains highly cyclical and is tightly linked to macroeconomic activity, infrastructure investment, and logistics demand across multiple sectors. In FY25 (till June 2025), the industry demonstrated a notable rebound, with total commercial vehicle (CV) volumes surging by ~96.7% year-on-year (YoY) to ~5,162 units. Truck production rose to ~4,366 units, while bus production climbed to ~796 units, reflecting renewed demand from logistics, construction, and oil marketing companies. The uptrend was supported by relative stability in the exchange rate, easing of supply chain bottlenecks, and partial revival in transport sector liquidity. However, the sustainability of this recovery remains uncertain, as the industry continues to be vulnerable to foreign exchange volatility, CKD supply restrictions, and evolving regulatory measures. In contrast, FY24 marked one of the most challenging years for the sector. According to PACRA’s sector review, production and sales volumes fell by ~30.6% YoY, while industry revenues contracted by ~32.1% YoY, with average operating margins slipping into negative territory due to persistent cost-push inflation, high policy rates, and elevated input costs. Structural bottlenecks, including heavy reliance on imported Completely Knocked Down (CKD) kits, exposure to exchange rate fluctuations, and limited fleet renewal, further constrained industry competitiveness. Despite some stability in the macro backdrop, with GDP expanding by ~2.4% and Large-Scale Manufacturing (LSM) growing by ~0.9% during the year, the trucks and buses segment remained muted, reflecting suppressed consumer and institutional demand. PAMA statistics validated this weak performance, as total CV production dropped from ~3,775 units in FY23 to ~2,623 units in FY24 (–30.5% YoY), underscoring the impact of rising inflation, tightened financing availability, and rupee volatility on sector volumes. Forward-looking, the National Trucking Policy 2018 is expected to play a significant role in reshaping demand. The policy emphasizes fleet modernization, enforcement of axle load limits, safety standards, and emissions compliance. Once fully implemented, it could drive replacement demand for outdated trucks, creating a growth opportunity for formal sector OEMs like GIL, Master, and Hino.

Within this competitive environment, Ghandhara Industries Limited (GIL) has consistently upheld its leading market position in trucks through the exclusive assembly and distribution of Isuzu commercial vehicles. During FY25 (till June), GIL further consolidated its leadership, producing ~2,891 units, which translated into an elevated ~65.4% market share. By comparison, Master Motors’ share stood at ~23.5% (~1,024 units), while Hino and JAC lagged at ~6.6% and ~4.5%, respectively. This expansion reflects GIL’s ability to scale volumes faster than peers in a recovering market, reinforcing its dominance in the truck segment. In FY24, GIL produced ~1,284 trucks, securing a dominant ~58.3% share of industry truck production, as per PAMA. This comfortably outpaced peers, with Master Motors holding ~23.8% (~524 units), Hino at ~11.2% (~246 units), and Ghandhara Automobiles Limited (~JAC) at ~6.8% (~150 units).

Financially, GIL delivered a strong performance in FY25, reflecting sustained recovery and improved operational strength. Revenue rose to ~PKR 37,463mln in FY25, up by ~155% from ~PKR 14,666mln in FY24, driven by higher sales volumes and favorable pricing dynamics. The Company’s bottom line also posted exceptional growth, with net profit reaching ~PKR 4,584mln in FY25, reflecting an increase compared to ~PKR 781mln in FY24. Profitability metrics strengthened across the board, with gross margins improving on account of scale efficiencies, operating margins reflecting cost discipline, and net margins rising to healthy double-digit levels. These improvements underscore GIL’s strengthened financial profile, enhanced resilience, and renewed capacity to pursue growth initiatives amidst a challenging macroeconomic environment.

The Company’s margins posted a notable improvement during the review period, reflecting a combination of favorable pricing dynamics, operational efficiencies, and lower financing costs. The gross profit margin rose to ~24.3% in FY25 (FY24: ~19.6%), supported by revised product pricing amidst rising input costs and better capacity utilization that allowed fixed overheads to be absorbed more effectively. In parallel, several cost optimization initiatives, including streamlined production processes and reduced wastages, further strengthened gross profitability. The operating margin improved to ~17.5% in FY25 (FY24: ~9.6%), underscoring enhanced operational control and disciplined expense management. This reflects the Company’s ability to contain administrative and distribution costs while benefiting from economies of scale due to higher volumes. The net margin expanded to ~12.2% in FY25 (FY24: ~5.3%), driven by higher operating profitability and a sharp reduction in finance costs on account of lower borrowings. This significant uplift in margins highlights the Company’s enhanced financial resilience and ability to translate topline growth into sustainable earnings.

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 requirement is primarily driven by the need to finance inventory buildup and trade receivables, given the nature of its business cycle, which entails a considerable lead time between raw material procurement, production, and eventual sales realization. Historically, this requirement has been met through a combination of internal cash generation and short-term borrowings from financial institutions. In FY25, gross working capital days improved significantly to ~75 days, reflecting a marked reduction from ~163 days in FY24. The improvement was largely attributed to optimized procurement schedules, efficient inventory management, and better alignment of production planning with market demand. Likewise, net working capital days declined to ~67 days in FY25, down from ~150 days in FY24, owing to tighter credit controls, improved receivable collections, and effective supplier payment management. This substantial YoY reduction in working capital intensity underscores the Company’s enhanced operational efficiency, disciplined cash flow management, and strengthened liquidity position, which collectively reduced reliance on external financing.

The Company’s free cash flow from operations (FCFO) demonstrated a substantial improvement, rising to PKR ~5,369mln during FY25 (FY24: PKR ~1,203mln). This strong cash generation primarily stemmed from enhanced profitability, efficient working capital management, and lower finance costs. The robust operating cash flows reflect a sound liquidity position, providing the Company with ample flexibility to fund expansion, support working capital requirements, or further deleverage. Consequently, the Company’s coverage indicators strengthened notably. The interest coverage ratio improved significantly to ~59.8x in FY25 (FY24: ~2.5x), highlighting a solid capacity to service finance costs through operational earnings. Similarly, the core coverage ratio rose sharply to ~43.5x in FY25 (FY24: ~2.3x), reflecting enhanced ability to meet fixed obligations. These substantial improvements underscore the Company’s fortified financial risk profile, positioning it favorably against economic uncertainties and reinforcing confidence among creditors and investors.

The Company has maintained a conservative and low-leverage capital structure, which was further strengthened during the review period. Total debt declined sharply to PKR ~106mln by the end of June 2025, down from PKR ~1,452mln in FY24. Notably, the Company had no short-term borrowings outstanding, reflecting its ability to fully finance working capital requirements through internally generated funds. The remaining debt comprised minimal long-term borrowings of PKR ~72mln, translating into a leverage ratio of ~1.5%, compared to ~14.2% in FY24. These metrics highlight the Company’s prudent financial management and strategic reliance on equity and retained earnings for growth rather than external debt. A consistently low leverage ratio not only mitigates financial risk but also provides ample headroom to raise debt in the future for expansion or strategic investments. The strengthened capital structure positions the Company favorably to withstand macroeconomic volatility, such as interest rate fluctuations or currency movements, while reinforcing stakeholder confidence in its long-term financial sustainability.