Gharibwal Cement Limited (GCL) is incorporated on December 29, 1960 as a public limited company with the Securities and Exchange Commission of Pakistan. GCL's equity shares are quoted on Pakistan Stock Exchange.

Gharibwal Cement Limited was nationalized in the 1970s and remained under government control for nearly two decades. In 1992, as part of the privatization wave, Mr. Tousif Peracha and Mr. Abdur Rafique Khan, a foreign entrepreneur, acquired a majority stake in the Company. Mr. Tousif Peracha and Mr. Abdur Rafique Khan acquired a majority stake, marking a new phase of modernization and growth. Under their leadership, the Company has upgraded facilities, expanded market presence, and improved financial performance, establishing itself as a key player in Pakistan’s cement industry. GCL operates a state-of-the-art plant with a clinker production capacity of 6,700 tons per day. The plant consists of approximately 60% Chinese components and 40% European components

The Company is primarily engaged in the production and sale of cement. GCL’s registered office is situated in Pace Tower, Lahore, while its production facility is located in Ismailwal, Tehsil Pind Dadan Khan, District Chakwal.

GCL majority stake held by two families. Peracha family owns ~56% while Khan family holds 32% equity stake in the Company; all through individuals. However, Mr. Muhammad Tausif Peracha (single key shareholder) is identified as the man at the last mile.

A tacit understanding between shareholding families necessitates formal documentation.

Mr. Muhammad Tausif Peracha and Mr. Abdur Rafique Khan have been business partners for over three decades, collaborating on various international ventures, primarily in shipping and real estate. The next generation has expanded into the entertainment and food industries, further diversifying the business portfolio. Their extensive experience and long-standing association across multiple sectors contribute to their strong business acumen.

The financial strength of the sponsors is considered adequate, supported by their independent business ventures and property holdings.

The overall control of the Company rests with a nine-member Board of Directors, including the Chairman, Khalid Siddiq Tirmizey, and the CEO, Mr. Muhammad Tousif Peracha. In addition to them, the Board comprises two Executive Directors, three Non-Executive Directors, and two Independent Directors, ensuring compliance with the Corporate Governance Code for listed companies.

Each board member has attained a professional qualification along with vast experience in different fields that is evidence of their competency to make key decisions regarding the company's operations. The board members’ have good business acumen on the back of significant local industry exposure in several sectors. Mr. Khalid Siddiq Tirmizey serves as the Chairman of the Board, bringing over 31 years of experience in the banking industry. He has a proven track record as a qualified chief executive, with more than 21 years of leadership experience at The Bank of Punjab and Fayal Bank Limited. Additionally, Mr. Tirmizey possesses extensive expertise across various sectors and currently holds the position of Chairman on several corporate boards.

GCL has established a governance structure in compliance with the Code of Corporate Governance. The Board of Directors (BoD) plays a crucial role in setting the Company's strategic direction while ensuring the implementation of rigorous risk management and internal control systems. The Board of Directors has established two key committees— the Audit Committee and the Human Resource & Remuneration Committee—to assist in relevant matters. Additionally, the Board has constituted an Investors’ Relationship Committee, responsible for addressing investor complaints and recommending measures to enhance investor services. This committee also oversees the allotment of shares kept in abeyance, shares issued upon employee stock option exercises, and the allotment of privately placed preference shares, debentures, and bonds, if any. During the reporting period, the Audit Committee convened four meetings, while the Human Resource & Remuneration Committee held one meeting.

Aa publicly listed company, GCL’s Board is dedicated to upholding the highest standards of transparency, accountability, and ethical conduct. To foster effective communication with stakeholders, the Company ensures the timely preparation of financial statements with all necessary disclosures, in compliance with Pakistan Stock Exchange (PSX) rules and Securities & Exchange Commission of Pakistan (SECP) regulations.   M/s Kreston Hyder Bhimji and Co. Chartered accountants, ‘A’ category SBP panel member, the external auditors have given an unqualified opinion on the company’s financial statements for the year ended Jun-24.

The organizational structure of the company is divided into eight key functions. These include i) Operations and Projects, ii) Procurement, iii) Finance, iv) Marketing/ Commercial, v) Technical Advisory, vi) Information Technology, vii) Administration/ HR, and viii) Internal Audit. The Director Operations and Projects, supported by GM Works and his team, resides at Plant. All functional heads report to the CEO except Internal Audit, who reports to the Audit Committee.

Mr. Tousif Peracha the CEO, a seasoned industrialist with more than 30 years of experience across a wide array of sectors, including international shipping, petroleum products, textiles, real estate development, glass, cement, and automobile manufacturing. He is accompanied by a team of qualified and competent individuals who head their respective departments

The management is supported by four key committees that play a vital role in strategic decision-making and operational oversight. The Core Executive Committee focuses on high-level business strategies and overall organizational direction. The Risk Management Committee is responsible for identifying, assessing, and mitigating potential risks. The Investor Relations Committee ensures transparent communication with shareholders and addresses investor concerns, fostering trust and engagement. Lastly, the Finance and Policy Committee oversees financial planning, policy formulation, and compliance to maintain the company's fiscal health and regulatory adherence. Together, these committees strengthen governance and enhance overall management efficiency.

The company deploys ERP as operating software to manage the company's financials, operations, supply chain, reporting and other business-related activities. The quality of MIS reporting considered good

The Company has well designed internal control systems, effectively implemented, and monitored, supported by a comprehensive audit control system that ensures accurate financial reporting, adherence to operational and strategic goals, and compliance with laws and regulations. The Company employ well-documented Standard Operating Procedures (SOPs), which are regularly reviewed and updated as needed. The Internal Audit Function, led by a qualified and experienced team, that evaluates the effectiveness of controls and compliance. This independent oversight provides the Audit Committee and the Board with assurance on the adequacy of our risk management and governance processes. The scope and authority of the Internal Audit Function are clearly defined and approved by the Audit Committee.

The local cement industry faced significant challenges throughout FY24, primarily due to the country's economic difficulties, including high inflation, soaring interest rates, and reduced developmental activity. Additionally, political instability led to lower Public Sector Development Program (PSDP) spending, compounding the challenges faced by the construction sector, which was already struggling with rising input costs. Despite these challenges, the cement industry in Pakistan witnessed marginal growth of ~1.6%, reaching 45.3mln MT during the year ending June 30, 2024, compared to 44.6mln MT last year. Although the local sale volumes declined by 5% (FY24: 38.2mln MT, FY23: 40.0mln MT), the overall surge was driven by a significant rise in export dispatches of 56%, reaching 7.1mln MT, up from 4.6mln MT last year. A similar trend was witnessed during 1QFY25, with the local dispatches recording a decline of ~20% (1QFY25: 8.1mln MT, 1QFY24: 10.1mln mln MT), while export dispatches grew by ~22% (1QFY25: 2.1mln MT, 1QFY24: 1.8mln MT). Despite the decline in sales volumes, the local cement manufacturers are witnessing a rising trend in their recorded revenues due to the higher prices reflecting the increase in the cost of production that is being passed on to the consumers. As a result, cement manufacturers have successfully maintained their margins. The industry also witnessed a rise in installed capacity, which now stands at approx. 82mln MT per annum. However, based on the stressed demand, the capacity utilization remained between 50-55% during FY24. Going forward, FY25 brings some relief for the industry in the form of consistent reduction in policy rates, declining inflation, a stable exchange rate, and gradual increases in SBP reserves along with political stability. However, the development activity in the form of construction projects to stimulate the economy is still on hold.

Gharibwal Cement is among middle-tier cement players with an annual operational capacity of 2.01mln Tons. Over the last few years, the Company commenced some projects in order to gain overall efficiency which included raw material conveyer belt, setting up a WHRPP, and cement grinding mill.

In FY24, GCL recorded cement dispatches of 1.140mln MT (FY23: 1.296mln MT), generating net revenues of PKR 18,165mln (FY23: PKR 18,316mln). This represents an 0.8% decrease, primarily driven by lower demand and decline in overall volumes. Similar trend was witnessed during 1QFY25,resulting in net revenues of PKR 4,317mln (1QFY24: PKR 4,358mln),.

The Company has consistently enhanced its margins through effective cost control measures and improved retention prices, driven by strategic initiatives undertaken by management. Key factors contributing to this improvement include the installation of a 24 MW solar power plant and the implementation of a cooler system that reduces coal consumption by 2-3%, enhances heat recovery, and improves clinker quality. Additionally, the Company has opted for locally sourced Khushab coal instead of imported coal, further enhancing operational efficiency. As a result, the Gross Profit Margin increased to 27.2% in 1QFY25 (FY24: 20.8%, FY23: 20.7%, 1QFY24: 19.9%). The Net Profit Margin also improved, reaching 12.4% in 1QFY25 (FY24: 9.6%, FY23: 6.7%, 1QFY24: 9.4%), supported by reduced leverage and the favorable impact of declining policy rates on profitability.

The Company initially announced a capacity expansion of 1 million TPA; however, due to reduced demand, the management has decided to implement the expansion in phases. Upon completion, this expansion will increase the effective capacity to 10,000 TPD. The project is estimated to cost PKR 6.5 billion, with a debt-to-equity ratio of 50:50. The Company has already imported key machinery and equipment, including the kiln, cooler, and pre-heater from FLSmidth, while basic infrastructure work is also progressing. Fully prepared for the expansion, the Company will proceed once market demand improves. Additionally, GCL is continuously working on cost control measures to enhance margins.

1QFY25, GCL's working capital requirements, represented by the net cash cycle (net working capital days), remained stable at 176 days (FY24: 127 days). The Company effectively manages its working capital needs through internally generated cash flows.

During 1QFY25 and FY24, GCL's Free Cash Flow from Operations (FCFO) rose to PKR 1,036mln and PKR 3,273mln, respectively (1QFY24: PKR640mln, FY23: PKR2,175mln), driven by improved profitability. As a result, the Interest Coverage Ratio (FCFO/Finance Cost + CMLTB + Excess Borrowings) improved to 7.4x in 1QFY25 from 7.6x in FY24, highlighting the Company’s enhanced ability to comfortably meet its finance costs due to stronger liquidity generation from operations.

As of FY24, the Company's capital structure remained moderate to low, with a total debt-to-debt plus equity ratio of 4.5% (1QFY25: 4.6%, FY24: 2.1%, FY23: 14.2%). The Company’s borrowings increased YoY from PKR 468mln in FY23 to PKR 1,165mln in FY24, primarily due to a long-term loan for enhancing the energy mix through the installation of a 12 MW solar power plant. Going Forward, the Company's leverage may increase depending on the execution of its planned expansion projects.