AHL Research has reviewed the performance of Ghandhara Automobiles Limited for the period of 1QFY26.  Ghandhara Automobiles Limited (GAL) announced its financial results for 1QFY26 today, posting a PAT of PKR 1,672mn (EPS: PKR 29.33) compared to PKR 601mn (EPS: PKR 10.55) in SPLY, up by 2.8x YoY but down by 8% QoQ.

• Net revenue for the quarter clocked in at PKR 13,519mn, depicting a 253% YoY surge, driven by robust sales of the JAC T9 Hunter, with an assumed 1600 units sold during the quarter. Additionally, JAC X200 volumes improved by 7% YoY to 261 units, while JAC truck sales grew 5x to 129 units.
• Gross margins on YoY basis declined to 17.7% in 1QFY26 from 18.6% due to low margins on JAC T9 hunter. On a QoQ basis, it remained largely stable at 17.7%, versus 17.3% in the previous quarter, primarily owing to the stable PKR parity against the Chinese yuan.
• Other income rose YoY to PKR 166mn, supported by higher cash balances and short-term investments. However, on a QoQ basis, it declined by 54%, reflecting a reduction in both these components during the quarter.
• Finance costs dropped 83% YoY to PKR 14mn, reflecting the decline in overall borrowings.
• Additionally, profit from associates supported earnings, contributing PKR 296mn (up 3.2x YoY) from Ghandhara Industries Limited, in which the company holds a 17% stake. The increase was driven by stronger sales of ISUZU trucks and buses compared to the same period last year.
• The company recorded an effective taxation of 33.3% in 1QFY26 vis-à-vis 17.6% in the same period last year. The company recorded an effective taxation of 38.4% in 4QFY25.
• We maintain our ‘BUY’ stance on GAL with a June’26 target price of PKR 764.7/share. At current levels, the stock is trading at an FY26e P/E multiple of 6.1x.