BMA Research has issued a report on Ghani Glass Limited (GHGL), initiating coverage with a BUY rating and a target price of PkR 65.9/sh, indicating a potential upside of 55.8% along with a 7.1% dividend yield, totaling a 62.9% return. The demand for glass products is rising in Pakistan due to changing consumer preferences and urbanization, with GHGL projected to achieve a 3-year bottom-line CAGR of 8%. The company has maintained stable gross margins of approximately 27% over the past decade.

Local demand is expected to improve, with projected growth of 3% in FY26 and 5% in FY27, driven by a recovery in cement dispatches and increased construction activities spurred by monetary easing. GHGL benefits from its dominant position in the float glass segment, controlling 98% of domestic demand, which supports strong pricing power.

Prolonged fiscal discipline is anticipated to stabilize the macroeconomic outlook, enhancing public sector development projects. Reflective glass is gaining popularity, particularly in high-rise buildings, resulting in improved energy efficiency.

With 64% of revenue from float glass in FY24, GHGL is well-positioned to optimize gross margins, which are expected to improve to 29% from FY25. The procurement of raw materials is favorable, as they are sourced locally, mitigating risks associated with exchange rate volatility and shortages.