Is GHNI poised to ride the economic recovery?
Chase Securities initiated coverage on Ghandhara Industries Limited (GHNI) with a ‘Buy’ recommendation and a DCF-based target price of PKR 1,033 for Dec-25, reflecting an attractive upside potential of 35%.
With Pakistan’s economic outlook improving and multiple macro tailwinds emerging, GHNI is well-positioned to deliver strong growth in the years ahead. A mix of sectoral drivers, strategic product launches, and favorable monetary conditions set the stage for a meaningful re-rating of the stock.
Why GHNI stands out?
Several key triggers make GHNI a compelling investment:
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- Mining sector revival: Increased activity in mining and related infrastructure is expected to fuel demand for heavy-duty trucks and prime movers, core products for GHNI.
- Axle load regime enforcement: Continued implementation of stricter axle load regulations is pushing logistics companies to upgrade their fleets to comply, increasing replacement demand for GHNI’s vehicles.
- Monetary easing: With interest rates starting to decline, vehicle financing is likely to pick up, boosting demand for commercial vehicles.
- New ISUZU D-Max launch: The launch of the new D-Max pickup model is expected to generate significant volumetric growth, especially in the 4×4 consumer and light commercial segments.
Strong product lineup & dealer network
GHNI has a comprehensive portfolio across the commercial and light commercial vehicle space. Coupled with its extensive nationwide dealership network, it is well-equipped to capture growth in both the replacement and first-time buyer segments.
Financial snapshot?
| Fiscal Year | EPS (PKR) | EPS Growth | DPS (PKR) | Div. Yield | P/E (x) | Unit Sales | ROE |
|---|---|---|---|---|---|---|---|
| FY23 | 4.21 | -75% | 0.00 | 0% | 181 | 1,794 | 2% |
| FY24 | 18.34 | 336% | 0.00 | 0% | 42 | 1,487 | 9% |
| FY25f | 86.19 | 370% | 4.00 | 1% | 9 | 3,345 | 34% |
| FY26f | 119.89 | 39% | 18.00 | 2% | 6 | 4,136 | 35% |
| FY27f | 158.62 | 32% | 32.00 | 4% | 5 | 5,196 | 35% |
Source: Chase Securities Research
Valuation perspective
GHNI is currently trading at just 9x FY25 earnings, dropping to 5x by FY27—remarkably cheap for a company expected to grow EPS at a 3-year CAGR of over 100%. With ROEs climbing to 35% and unit sales more than tripling from FY24 to FY27, the stock offers a rare mix of value, growth, and operating leverage.
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Final Thoughts
The truck and pickup segment is on the cusp of a recovery, and GHNI stands to be a major beneficiary. The combination of regulatory push, financing revival, new product cycles, and valuation support makes this an attractive time to enter the stock.
Source: Chase Securities
⚠️ 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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