PACRA Assigns Positive Outlook to Ghandhara Industries Limited

Ghandhara Industries Limited ("GIL" or "the Company"), a public listed entity, is engaged in the progressive manufacture, assembly, and marketing of Isuzu trucks, buses, D-Max pickups, and Zhongtong buses in Pakistan, and in FY26 it expanded its portfolio with the launch of Zhongtong buses. GIL operates under the umbrella of the Bibojee Group of Companies, a diversified conglomerate with interests in automobiles, textiles, insurance, construction and tyres. The Company's facility at S.I.T.E., Karachi houses its progressive manufacturing and body fabrication operations, while vehicle assembly is outsourced to its associated concern, Ghandhara Automobiles Limited. The portfolio comprises light-duty (N-Series) and medium/heavy-duty (F-Series and C-Series) trucks, D-Max pickups, buses, and Zhongtong luxury coaches, and customized vehicle bodies. GIL benefits from its long-standing technical collaboration with Isuzu, Japan, which gives it access to global designs and quality standards. The Board, supported by an experienced management team, ensures strong governance and robust internal controls. The trucks and buses industry in Pakistan is inherently cyclical and is influenced by infrastructure development, logistics demand, and macroeconomic conditions. Industry sales rose ~61% to ~8,424 units in FY26 (FY25: ~5,232 units), led by trucks, which grew ~67% to ~7,439 units (FY25: ~4,444 units). Growth was supported by greater macroeconomic stability, lower financing costs and wider availability of vehicle financing. The SBP tightened its monetary stance toward the end of FY26, however, and the policy rate stood at ~11.5% at year-end, which may temper financing-led demand going forward. The sector is also undergoing a policy transition: tariff incentives under the Automotive Industry Development and Export Plan lapsed on 30 June 2026, and the New Energy Vehicle Policy 2025–30 envisages a 30% shift in new truck and bus sales to new energy vehicles by 2030. GIL retained its leadership in the segment with a combined truck and bus market share of ~53% in FY26 (FY25: ~59%). Its truck market share stood at ~58% (FY25: ~65%), as competitors gained ground in a rapidly expanding market. The Company's total volumes increased to ~5,263 units in FY26 (FY25: ~3,402 units), and revenue rose to ~PKR 60.7bln (FY25: ~PKR 37.5bln). Gross margin eased to ~23.1% (FY25: ~24.3%) slightly as material and royalty costs increased, while the net margin stood at ~11.4% (FY25: ~12.2%). In absolute terms, the bottom line rose to ~PKR 6.9bln (FY25: ~PKR 4.6bln). The financial risk profile of the Company remains strong, supported by healthy cash flow generation, a debt-free capital structure and adequate liquidity, which together keep coverages at comfortable levels. The revision in outlook to Positive reflects the Company's sustained market leadership through an industry upcycle, a consistent improvement in scale and profitability, and a strengthened financial profile marked by the absence of debt and a healthy liquidity cushion. The diversification of the bus portfolio through the Zhongtong collaboration further supports the Company's business profile.
The ratings are dependent on GIL's ability to sustain its market leadership and profitability amid intensifying competition and a tightening interest rate environment, while preserving its strong liquidity and low leverage. Realization of the Positive outlook is contingent upon the Company maintaining its current performance trajectory, achieving its projected volumes, and executing the Zhongtong bus line within planned timelines. Its ability to adapt its product portfolio and cost structure to the evolving tariff and new energy vehicle regime, along with prudent management of related party transactions, will remain critical.

About the Entity
Ghandhara Industries Limited, established in 1963 and listed on the Pakistan Stock Exchange, operates as the assembler of Isuzu trucks, buses, and pickups, and Zhongtong buses in Pakistan. and pickups, and Zhongtong buses in Pakistan. The Company is majority-owned by the Bibojee Group of Companies, with Bibojee Services (Pvt.) Ltd. holding ~39% and Ghandhara Automobiles Limited ~18%. The production facility at SITE, Karachi, manufactures trucks, buses, pickups, and customized vehicles with strong after-sales support through its nationwide 3S network.