Ghandhara Automobiles Limited (GAL) announced its financial results for FY25 today, whereby the company posted the highest-ever Profit After Tax (PAT) of PKR 4,096mn (EPS: PKR 71.85), significantly up by 11x YoY, according to a report of AHL Research.

During 4QFY25, the profitability of the company amounted to PKR 1,822mn (EPS: PKR 31.9,6), increasing by 6x YoY and 5x QoQ. Along with the result, and in line with our expectations, the company announced its first-ever final dividend (DPS: PKR 10).

Result Highlights

• Net sales stood at PKR 34,512mn in FY25, reflecting a 4x YoY rise. On a quarterly basis, revenue in 4QFY25 rose by 5%. x YoY. The robust growth in FY25 was driven by higher sales volumes, with JAC X200 sales doubling YoY to 1,274 units, while JAC truck volumes improved by 21% YoY to 198 units. Additionally, we estimate that ~640 units of Dongfeng trucks and ~1,500 units of JAC T9 Hunter were sold during the year.
• Gross margins in 4QFY25 improved to 17.3% from 14.0% in the corresponding period last year, largely driven by economies of scale and improved cost efficiencies resulting from higher sales volumes. However, margins contracted compared to the preceding quarter (21.3%), primarily due to the low margins on JAC T9 resulting from its competitive pricing strategy.
• Additionally, profit from associates boosted earnings, with a contribution of PKR 616 million (up 14.5% year-over-year) from Ghandhara Industries, in which the company holds a 17% stake.
• The company recorded an effective tax rate of 31.7% in FY25, compared to 25.4% in the same period last year. In 4QFY25, the company recorded an effective taxation of 38.4% vs 19.1% in SPLY.

Recommendation

• We maintain our ‘BUY’ stance on GAL with a June’26 target price of PKR 764.7/share as highlighted in our report (Shiftin gears to higher profit areas).  At current levels, the stock is trading at an FY26 P/E multiple of 6.1x.