Is GHNI the next big winner? here’s why it is
Chase Securities initiates coverage on Ghandhara Industries Limited (GHNI) with a ‘Buy’ rating and a DCF-based Dec-25 target price of PKR 1,033, representing an upside potential of 35% from current levels.
As Pakistan’s economy transitions into a phase of industrial recovery, GHNI is well-positioned to ride the upswing, particularly as the transport and mining sectors regain momentum. With a compelling product portfolio, expanding distribution footprint, and positive macro tailwinds, GHNI stands out as a leading proxy for the revival of commercial vehicles.
What makes GHNI a strong pick?
Our preference for GHNI is driven by four core triggers:
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- The revival of the mining sector is accelerating the demand for prime movers and trucks.
- Axle load enforcement is compelling fleet owners to expand, fueling replacement and new demand.
- Monetary easing will reduce financing costs, opening up the segment to more fleet buyers.
- The ISUZU D-Max relaunch is expected to generate robust volumetric growth in the light commercial segment.
These factors, combined with GHNI’s broad product line and nationwide dealership network, make it well-positioned to capitalize on sector-wide growth.
Financial outlook
GHNI is on track to deliver one of the most impressive earnings growth stories in the auto space. Over the next three years, the company is expected to grow earnings at a CAGR of over 90%, with ROEs rising to 35%.
| Metric | FY23 | FY24 | FY25f | FY26f | FY27f |
|---|---|---|---|---|---|
| EPS (PKR) | 4.21 | 18.34 | 86.19 | 119.89 | 158.62 |
| EPS Growth | -75% | 336% | 370% | 39% | 32% |
| DPS (PKR) | 0 | 0 | 4.00 | 18.00 | 32.00 |
| Dividend Yield | 0% | 0% | 1% | 2% | 4% |
| P/E (x) | 181 | 42 | 9 | 6 | 5 |
| Unit Sales | 1,794 | 1,487 | 3,345 | 4,136 | 5,196 |
| ROE | 2% | 9% | 34% | 35% | 35% |
Source: Chase Securities Research
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Industry outlook: a sector in transition
Pakistan’s Light & Heavy Transport Vehicle Segment is emerging from a prolonged slump triggered by macroeconomic volatility. As economic stability returns and industrial activity picks up, demand for logistics and fleet expansion is poised to rebound.
Recent indicators underscore this trend:
- Net outstanding credit to road freight transport has jumped by PKR 4.5 billion, pointing to a revival in fleet financing.
- The existing fleet size is inadequate to meet growing transportation demand, especially for mining and industrial logistics.
- As large mining projects like Reko Diq scale up, they will require specialized, high-capacity vehicles — a demand GHNI is primed to serve.
Mining: the game changer
The mining boom unfolding in Pakistan will be a major catalyst for GHNI. With upcoming projects in copper, gold, and coal, demand for heavy-duty trucks purpose-built for mining operations is expected to surge.
Precedents from other countries validate this trend:
| Country | Project | Truck Sales Impact |
|---|---|---|
| Mongolia | Oyu Tolgoi | 11.7% CAGR in truck registrations (2010–2023) |
| Zambia | Copper Belt | 200% increase in CV sales (2006–2012) |
| Indonesia | Martabe Gold Mine | 200% increase in CV sales (2005–2015) |
Pakistan is next in line, and GHNI, with its strong manufacturing base and dealer network, is ready to serve this upcoming demand.
GHNI checks all the right boxes — aggressive earnings growth, improving ROE, an expanding product portfolio, and exposure to the country’s next industrial growth cycle. With unit sales forecasted to triple by FY27 and profitability rising sharply, the valuation remains extremely attractive at 9x FY25 earnings, falling to 5x by FY27.
Source: Chase Securities Pakistan (Private) Limited
⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →
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