Ghandhara Automobiles Ltd. (GAL) held its corporate briefing today to discuss its FY24 & 1QFY25 financial results and future outlook.

The following are the key highlights:

·         Company’s standalone revenue decreased to PkR5.4bn in FY24, from PkR10.3bn in FY23, due to decline in sales volume.

· Subsequently, the company posted a loss of PkR258mn (LPS: PkR4.54) in FY24 compared to earnings of PkR63.7mn (EPS: PkR1.12) in FY23 due to the decline above in volumes and lower gross margins.

·         Industry-wide a total of 3,257 commercial vehicle were sold in FY24 compared to 4,058 in FY23, down 20%YoY. Moreover, the sales volume of passenger cars in the SUV segment clocked in at 15,225 units in FY24 compared to 24,194 units in FY23, down 37%YoY.

·         Sales for Cherry Tigo clocked in at 198 units in FY24 and 87 units sold in 1QFY25, whereas sales for Dongfeng clocked in at 340 units in FY24 and 135 units in 1QFY25.

·         Earnings for 1QFY25 clocked in at PkR406mn (EPS: PkR7.12) compared to a loss of PkR117mn (LPS: 2.05) in SPLY, due to improvements in gross margins, clocking in at 16.0% compared to 1.2% in SPLY amid supply chain constraints.

·         Management stated that the launch of the P-HEV has been further delayed due to the unavailability of right-hand drive models from its Chinese supplier.

·         Additionally, the Chery Cross-PHEV is currently in the R&D phase with the Chinese manufacturer, which is expected to be completed by the 3QFY25. Completely Built Units (CBUs) will be imported, followed by the introduction of Completely Knocked-Down (CKD) units.

·         Management briefed that demand for trucks improved due to the axle load implementation by the govt. Financing is provided under the Kamyab Jawan scheme.

·         Additionally, competition in the heavy-duty truck segment is limited due to different truck models’ varying pricing and horsepower offerings.

·         The script is not in our formal coverage.

Courtesy – AKD Research