Ghandhara Industries Limited ("GIL" or "the Company") was incorporated in Pakistan on February 23, 1963 as a public limited company and is listed on the Pakistan Stock Exchange under the symbol GHNI. The registered office and manufacturing facilities are located at F-3, Hub Chowki Road, S.I.T.E., Karachi, and the Company has regional offices at Lahore, Multan, Rawalpindi and Peshawar. GIL is part of the Bibojee Group, and Bibojee Services (Private) Limited is its ultimate holding company.

The Company traces its origin to 1963, when it was established by General Motors Overseas Distribution Company for the local assembly and distribution of commercial vehicles, and was subsequently acquired by Late Lt. General (Retd.) Habibullah Khan Khattak. The enterprise was nationalised in 1972 and operated thereafter as National Motors Limited. Following the privatisation process of 1992, the Khattak family regained ownership and the original identity of Ghandhara Industries Limited was reinstated later in the decade. The subsequent growth phase has been organic in nature, built around the technical collaboration with Isuzu of Japan and the Thailand based pickup arrangement, progressive deepening of local manufacturing content, and the build out of a nationwide dealership footprint. Expansion has been funded predominantly through internally generated cash and retained earnings, with recourse to bank borrowings confined to working capital cycles, a pattern reinforced in recent periods through the systematic retirement of debt.

GIL is engaged in the progressive manufacture, assembly and marketing of Isuzu trucks, buses, D-Max pickups, and Zhongtong buses in Pakistan. It markets these through the Isuzu Pakistan brand under the positioning "King of Trucks." The range covers pickups through heavy-duty trucks and buses. It includes light-duty N-Series trucks such as the NHR, NKR, NPR and NPS, medium and heavy-duty F-Series trucks such as the FTR, FVR and FVZ, and the CYZ prime mover. The bus line-up includes the NKR microbus, the NPR mini-coach and the MT-series passenger bus, while the pickup range includes the D-Max, including the X-Terrain variant. During FY26 the Company widened its product range by launching Zhongtong buses under a collaboration agreement with Zhongtong Bus Holding Co. Limited, and management expects this line to add to and strengthen existing sales. Zhongtong luxury coaches are being introduced as CBUs, and a dedicated bus assembly line is being set up next to the existing bus body fabrication unit to allow gradual localization. The Company's facility is in the S.I.T.E. area of Karachi and houses the progressive manufacturing division and commercial body fabrication. Assembly of trucks, buses and pickups is outsourced to Ghandhara Automobiles Limited (GAL), an associated company. The main inputs are completely knocked down kits imported from Isuzu Motors Limited, Japan and Isuzu Motors Company (Thailand) Limited through the trading house Marubeni Corporation. In FY26 the Company sold 4,468 trucks and buses, including 40 Zhongtong buses, and 795 D-Max pickups, compared with 3,107 and 295 units respectively in FY25. All sales are made through a network of 41 dealerships across Pakistan, comprising 14 3S, 12 2S and 15 1S outlets. The network added a new 3S dealership in Sadiqabad during the year. After-sales support is handled by a dedicated parts and services function, and during the year it ran nationwide D-Max service campaigns and genuine oil campaigns through the dealers. Operations are almost entirely domestic, with gross exports of only PKR 82mln in FY26 (FY25: PKR 179mln).

Bibojee Services (Private) Limited holds a direct ~39.0% stake in the Company. Associated concerns hold a further ~18.48%, made up of Ghandhara Automobiles Limited at ~17.91%, The Ghandhara Tyre & Rubber Company Limited at ~0.47% and Bibojee Investments (Private) Limited at ~0.10%, which takes the group's aggregate holding to ~57.48%. Directors and their spouses hold ~0.18%. The remaining ~42% is held by the general public (~21.15%, local and foreign), modarabas and mutual funds (~5.14%) and other corporate and institutional holders. Control ultimately rests with the Khattak family through Bibojee Services, and Lt. Gen. (Retd.) Ali Kuli Khan Khattak chairs the Board.

The ownership structure has remained stable since family ownership was restored after privatization, and there were no ownership disputes or changes in the controlling block during the review period. The shares held by Bibojee Services (Private) Limited and the associated group concerns were the same as of FY26 and FY25, and together they held ~57.48% of the Company, which gives the sponsors a clear majority and makes a change of control unlikely. Because the family holds its interest through Bibojee Services as a formal holding company, the stake can pass from one generation to the next without disturbing control of GIL. This lowers succession risk at the owner level. The next generation is already in management: Mr. Ahmad Kuli Khan Khattak is Chief Executive Officer and Mr. Muhammad Kuli Khan Khattak is Deputy Chief Executive Officer, both on the Board as executive directors.

The sponsoring group carries a multi decade record of industrial ownership in Pakistan, with operating interests spanning automobile assembly, tyre manufacturing, textiles, insurance and construction. This breadth has exposed the sponsors to several demand cycles in the commercial vehicle and allied sectors and has built familiarity with tariff-based protection, import dependent supply chains and franchise relationships with international principals. Within the automotive vertical the group holds positions in both Ghandhara Industries Limited and Ghandhara Automobiles Limited, which provides visibility across truck, bus, pickup and passenger vehicle franchises and supports informed judgement on product and technology choices. The durability of the Isuzu technical collaboration is itself an indicator of the sponsors standing with an international principal and with the local business community.

The sponsors belong to the Bibojee Group, which has a broad industrial base. The group has three cotton spinning mills, a woollen mill, two automobile plants, a general insurance company, a tyre manufacturer and a construction company. Its listed concerns with common directorship with GIL include Ghandhara Automobiles Limited, The Ghandhara Tyre and Rubber Company Limited, The Universal Insurance Company Limited, Bannu Woollen Mills Limited, Janana De Malucho Textile Mills Limited, Rehman Cotton Mills Limited and Gammon Pakistan Limited. Because the group earns cash from several businesses and sectors, a slowdown in any one of them does not remove the sponsors' capacity to support GIL. The Company is, however, unlikely to need such support, since it is now a net contributor to the group. In FY26 it paid Bibojee Services a dividend of PKR 166mln, and it carried no interest-bearing debt at end-FY26. It also held PKR 15,380mln of liquid resources, made up of mutual fund investments of PKR 13,349mln and cash of PKR 2,031mln. This buffer is equal to about two-thirds of current liabilities and backs an equity base of PKR 22,355mln. On this basis, the sponsors' willingness to support GIL is untested, but their ability to do so appears adequate. The Company's own financial position is the main source of comfort in this assessment.

The Board has nine directors (eight male and one female): three independent, four non-executive and two executives. It was last elected on April 10, 2024, and the Chairman and Chief Executive Officer roles are held by different people. The four-member Audit Committee is chaired by independent director Mr. Sohail Hameed, and the Human Resource and Remuneration Committee is chaired by independent director Mr. Khalid Zareef Khan. In FY26 the Board met five times, the Audit Committee four times and the HR&R Committee once.

The Board brings together experience in the automotive, financial, governance and military fields. Mr. Sohail Hameed Khan, who chairs the Audit Committee, is a Fellow Chartered Accountant with over 41 years of experience, around 27 of them in the Middle East, and was formerly Chief Financial Officer of Saudi Binladin Group. Mrs. Shahnaz Sajjad Ahmad has more than two decades of experience in managing Bibojee Group companies and has been Chief Executive Officer of Bannu Woollen Mills Limited since 2009. Mr. Muhammad Kuli Khan Khattak is Deputy Chief Executive Officer and holds a Certified Director qualification from ICAP. Air Cdre. (Retd.) Shahid Kamal Khan served for around 32 years in the Pakistan Air Force. Mr. Taimur Asfandiyar Minwalla joined the Board as an independent director in 2024 and has over seven years of experience in strategic planning and business development. Several directors also sit on other Bibojee Group boards, which gives the Board visibility across the group's automotive businesses.

The Board met five times in FY26, which meets its policy of meeting at least once a quarter to review and approve financial and operational results. Attendance was strong. Eight of the nine directors attended every Board meeting, and the remaining director attended three of five. Leave of absence was granted for the missed meetings. The Chairman presided over all meetings, and the Company complied with regulatory requirements on how often the Board meets and how minutes are recorded and circulated. Two committees support the Board, each with documented terms of reference. The Audit Committee held four quarterly meetings during the year. Its chairman is an independent director, and its secretary is the Head of Internal Audit. The Chief Financial Officer attends by invitation to present the financial statements, and the committee chairman reports to the Board after each meeting. The Human Resource and Remuneration Committee met once to review senior executive compensation and organisational policies. The Board monitors management through several channels. It reviews interim accounts, profitability reviews and budgetary variances, and the explanations for them, on a periodic basis. It also relies on an internal audit function whose annual and quarterly plan is approved by the Audit Committee. The Chairman and Chief Executive Officer roles are held by different people, which avoids concentrating authority in one person. The Board's annual self-evaluation, which covers the achievement of corporate objectives, strategy direction and committee performance, rated its effectiveness as satisfactory for FY26.

An effective Internal Audit department reporting to the Audit Committee is in place that ensures transparency & compliance, identifies risks, and provides valuable insights to the management. M/s. ShineWing Hameed Chaudhari & Company, a QCR-rated firm, has expressed an unmodified opinion on the financial statements of the Company for the financial period ending June 30, 2026.

The Company follows a functional organisational design in which heads of department report directly to the Chief Executive Officer, who in turn reports to the board. The principal functions comprise finance and accounts, sales and marketing, production and plant operations, quality control, material management and procurement, after-sales and parts, information technology, and human resources and administration. Strategic and capital allocation decisions are centralised at the level of the Chief Executive Officer and the board, while operating authority over production scheduling, procurement execution, and dealer management is devolved to functional heads within an approved delegation of authority framework that sets financial limits by tier. This configuration keeps the decision chain short, supports coordination between procurement, assembly and sales planning, and maintains accountability at the departmental level.

Mr. Ahmad Kuli Khan Khattak leads the Company as Chief Executive Officer, supported by Mr. Muhammad Kuli Khan Khattak as Deputy Chief Executive Officer. Mr. Muhammad Aamir, FCA heads the finance function as Chief Financial Officer. Mr. Talha Ahmed Zaidi, FCA is Company Secretary, and Mr. Shahnawaz Damji, FCA is secretary to the Audit Committee. Key person risk sits mainly with the Chief Executive Officer, who manages the principal relationships with Isuzu and Zhongtong and sets overall direction. This risk is reduced by having an executive Deputy CEO from the sponsoring family, a stable second tier of management, and HR&R Committee oversight of senior appointments.

Management delivered the highest sales in the Company's history in FY26 while keeping first position in the truck and bus market. Cost control improved: distribution and administrative expenses fell to 5.1% of revenue from 6.8% in FY25, which lifted operating margin despite a slightly weaker gross margin. Return on equity was 38.6% in FY26 against 40.7% in FY25, because equity grew faster than profit. Management also added the Zhongtong range and set up a dedicated bus line, which shows it is responding to demand in the passenger transport segment.

The Company operates an integrated enterprise resource planning environment that links production planning, materials and inventory management, procurement, sales and distribution, fixed assets, and financial accounting within a single data structure. The system supports bill of materials control at the assembly line, tracking of kit and component inventory, dealer order processing, and receivable ageing, which reduces manual intervention and improves the integrity of data reaching management. Reporting is produced on a monthly cycle covering production and dispatch volumes, segment-wise sales, gross margin by product line, inventory holding and ageing, receivable recovery, and cash position, with variances against budget reviewed by the Chief Executive Officer and functional heads and escalated to the board through periodic performance reviews. Information technology governance rests with the technology function under the oversight of senior management, encompassing access control by user role, scheduled data backup, and continuity arrangements designed to restore core financial and operational applications following disruption.

An internal audit department functions independently of the operating departments and reports to the Audit Committee, with a risk-based annual plan approved by the Committee covering procurement and import documentation, inventory custody at plant and warehouse, dealer credit and collection, fixed asset verification, payroll, and statutory compliance. Audit observations are tracked to closure with management responses and timelines presented to the Committee on a periodic basis. Each department operates within a documented internal control framework, supported by segregation of duties in payment and procurement cycles, authorisation matrices, and reconciliation routines over inventory and receivables. The compliance function monitors obligations arising under corporate, tax, customs, environmental and labour regulations, and the Company maintains a satisfactory record with its regulators, with no material enforcement action affecting operations during the period under review. Risk management is exercised through management-level identification and periodic review of operational, supply chain, foreign exchange and credit risks, with escalation to the board where exposure thresholds are breached, while conflict of interest provisions, a code of conduct and whistle-blowing arrangements provide channels for reporting irregularities.

Pakistan's truck and bus industry is assembly-based. Local players put together completely knocked-down kits supplied under license by Japanese and Chinese principals, which leaves them with little influence over component pricing or technology cycles. The sector is important to the domestic economy because it carries most freight and intercity passenger transport, and it supports the local parts, tyre, steel fabrication and vehicle financing industries. Barriers to entry are moderate to high. A new entrant needs a license from an international principal, benefits from the tariff gap between kits and built-up imports, must invest in assembly and body-building facilities, and needs a nationwide sales, service and spares network. Chinese-origin franchises have still been able to establish themselves at lower price points. Supplier power is high because each assembler depends on a single principal for kits. Customer power is moderate but rises in downturns, when large fleet operators and institutional buyers purchase in tranches. The industry is highly cyclical. According to data from the Pakistan Automotive Manufacturers Association, truck and bus sales fell from 6,498 units in FY22 to 3,836 units in FY23 and to a low of 2,641 units in FY24. They then recovered to 5,232 units in FY25 and 8,424 units in FY26. The FY26 increase of 61% was led by trucks, where sales rose 67% to 7,439 units, while bus sales grew 25% to 985 units. Truck production rose to 7,545 units from 4,366 units in FY25. Demand is driven by overall economic activity and by interest rates, which affect vehicle financing and fleet leasing. Seasonal factors include crop movement, construction activity and public sector procurement at the end of the fiscal year. Input costs are also exposed to steel prices, freight rates and exchange rate movements. The FY26 recovery was supported by greater macroeconomic stability, lower financing costs than in previous years and wider availability of vehicle financing. Monetary conditions turned late in the year, however. The State Bank of Pakistan tightened its stance in response to renewed inflationary and external pressures, leaving the policy rate at 11.5% at the close of FY26, and year-on-year inflation rose to 11.07% in June 2026. The Ministry of Industries and Production regulates the sector through the Engineering Development Board, and tariff and duty structures are set under the federal fiscal framework. The policy environment is changing in ways that matter for the sector. The Automotive Industry Development and Export Plan 2021–26 has expired, and existing incentives remained in effect only until 30 June 2026. Customs, additional customs, and regulatory duties are now to be adjusted gradually, and special duty regimes for the auto sector and preferential sales tax treatment for localised parts are to be phased out by 2030. Under the New Energy Vehicle Policy 2025–30, 30% of new vehicle sales, including buses and trucks, are expected to move to new energy vehicles by 2030. As global principals develop electric and hybrid commercial vehicles, diesel-heavy portfolios face product obsolescence risk over the medium term. The main credit risks in the sector are therefore sharp swings in volumes linked to economic and interest rate conditions, dependence on imports and foreign currency, working capital intensity caused by long procurement lead times, pressure on margins in downturns when fixed overheads are spread over low volumes, and regulatory risk as tariff protection is withdrawn.

GIL is the market leader in Pakistan's truck and bus segment. Based on PAMA data, its combined share was ~53.4% in FY26, compared with ~59.4% in FY25, ~50.5% in FY24 and ~41.7% in FY23. It has held the first position in each of the last five years. In trucks, the Company sold ~4,332 Isuzu units in FY26, an increase of ~50% on FY25 and a ~58.2% share of the segment (FY25: ~65.1%). Its truck volumes grew more slowly than the industry in FY26 because competitors gained ground. Master, the main challenger, raised its truck share to ~26.1% from ~22.9%. JAC and Hino held ~10.5% and ~5.3% of truck sales, respectively. Isuzu bus sales fell to ~167 units from ~216 units, and its share dropped to ~17.0% from ~27.4%, while Master dominated with ~73.9% of bus sales. The Zhongtong luxury coaches launched during FY26 add ~40 units to GIL's bus sales and are intended to rebuild its position in this segment. In light commercial vehicles, D-Max volumes rose to ~795 units in FY26, which remains a niche share of about ~1.6% of the wider pickup and jeep market. GIL's competitive advantages are partly structural. The Isuzu franchise licence, a ~41-outlet dealership network with ~14 full-service 3S facilities, and established relationships with fleet customers are not easy for others to replicate. Its reputation for durability, fuel economy and resale value is more open to challenge, because lower-priced Chinese-origin franchises compete on price.

Revenue grew ~61.9% to PKR ~60,658mln in FY26 from ~PKR 37,463mln in FY25. The growth came from a ~54.7% increase in total units sold to ~5,263 and from price revisions. Almost all revenue comes from manufactured vehicles, and trading goods contributed only ~PKR 231mln. The truck and bus range remains the core of the business, while D-Max pickups became a larger contributor during the year. Because all sales are made through dealers, the Company's direct counterparty exposure is to its dealer network rather than to end-customers. Sales are concentrated geographically: the Federal and Punjab territory accounted for ~55% of sales, Sindh for ~39%, Balochistan for ~4%, and Khyber Pakhtunkhwa for ~2%. Sales are largely made against advances. Contract liabilities stood at PKR ~18,440mln as of FY26 (FY25: PKR ~11,162mln), and PKR ~10,754mln of revenue was recognized from advances held at the start of the year. Trade receivables were ~PKR 1,658mln, or ~2.7% of revenue. Non-operating income was PKR ~553mln net in FY26, compared with a net expense of PKR ~18mln in FY25, mainly because of a PKR ~828mln gain on the sale of mutual fund units and a PKR ~136mln gain on disposal of fixed assets. Revenue is earned in rupees while kit costs are linked to imports, and the Company manages this currency mismatch through pricing rather than hedging.

Gross margin eased to ~23.1% in FY26 from ~24.3% in FY25 because material cost rose to ~73.0% of revenue from ~70.3%, royalty to Isuzu increased to PKR ~289mln from PKR ~121mln, and outside assembly charges went up to PKR ~2,109mln from PKR ~1,229mln. Operating margin still improved to ~18.0% from ~17.5%, since operating expenses grew ~22.5% against revenue growth of ~61.9%. With the investment and disposal gains added, PBIT margin reached ~18.9% (FY25: ~17.5%). Finance cost was PKR ~82mln (FY25: PKR ~90mln) and consisted mostly of bank charges on letters of credit and guarantees. Net margin dipped to ~11.4% from ~12.2% because the effective tax rate rose to ~39.3% from ~29.0%. Super tax increased to PKR ~1,150mln from PKR ~658mln, and the FY25 charge had been reduced by a minimum tax adjustment of PKR ~609mln that did not recur in FY26. Profit after tax still grew ~51.1% to PKR ~6,927mln, and earnings per share rose to PKR ~162.57 from PKR ~107.58. Because material cost moves with volumes, a large part of the cost base adjusts in a downturn, but plant overhead, dealer support, and salaried staff costs are fixed and would weigh on margins if volumes fell.

The Company's outlook depends on continued Isuzu collaboration, replacement demand from the national truck fleet, and growth in the newly launched Zhongtong line. Zhongtong CBU luxury coaches were launched during FY26, and local CKD assembly on a dedicated bus line is targeted to begin by the end of 2026. Management expects to sell around ~5,800 trucks, buses and D-Max units in FY27, ~10.2% more than the ~5,263 units sold in FY26. If the FY26 sales mix and average realization hold, that volume implies revenue of around PKR ~66.8bln. Capital work-in-progress rose to PKR ~1,616mln from PKR ~633mln and includes PKR ~741mln for the Zhongtong bus line and PKR ~183mln for a solar project, with a further PKR ~1,257mln of capital expenditure committed. The main event risks are the change in auto sector tariffs after the incentive framework expired on 30 June 2026 and the target of 30% new energy vehicles by 2030, which will require the portfolio to be renewed. Monetary tightening at the end of FY26 could also dampen fleet financing demand and put pressure on the FY27 volume target. In its outlook, management expects further growth in volumes and profitability but recognizes risks from evolving domestic and international economic and political conditions.

The gross working capital cycle shortened slightly to ~73 days in FY26 from ~75 days in FY25, and the net cycle to ~65 days from ~67 days. Inventory days eased to ~64 from ~66, while receivable days stayed at ~9 and payable days at ~8. Inventory rose to PKR ~13,575mln from PKR ~7,755mln, led by raw material, which almost doubled to PKR ~8,908mln to meet higher bookings, and the provision for slow-moving stock increased to PKR ~423mln from PKR ~251mln. Trade receivables grew to PKR ~1,658mln from PKR ~1,200mln, and balances overdue by more than ~180 days doubled to PKR ~193mln, though they remain small. Customer advances made up ~78% of current liabilities and funded most of the cycle, keeping short-term trade leverage negative at -30.7% (FY25: -34.6%) and the current ratio at 0.9x. The Company used no short-term borrowing during the year. Payables to related parties stood at PKR ~109mln (FY25: PKR ~95mln).

EBITDA grew ~69.1% to PKR ~10,666mln in FY26, while free cash flow from operations rose a more modest ~20.3% to PKR ~6,460mln because taxes paid increased to PKR ~4,206mln from PKR ~939mln. Net cash from operating activities was PKR ~6,675mln (FY25: PKR 9,129mln), because working capital released only PKR ~292mln in FY26 compared with PKR ~3,882mln a year earlier. This cash funded capital expenditure of PKR 1,548mln, net mutual fund placements of PKR ~4,148mln and dividends of PKR ~387mln, and cash balances still rose to PKR ~2,031mln. With no financial debt outstanding, there are no covenant constraints.

The Company had no interest-bearing debt at the end of FY26 after settling its remaining lease liabilities of PKR ~106mln during the year. Leverage, including related-party payables, fell to ~0.5% from ~1.5%. Equity grew ~65.0% to PKR ~22,355mln, driven by profit of PKR ~6,927mln and a net revaluation surplus of PKR ~2,337mln. Unappropriated profit and the capital expenditure reserve together made-up PKR ~14,290mln of equity, and the revaluation surplus accounted for PKR ~7,639mln, or ~34%. Financial flexibility is high. Short-term borrowing limits were raised to PKR ~28,703mln from PKR ~17,450mln, the Company holds PKR ~13,349mln in Islamic money market and income funds, and as a listed entity it has access to equity markets.