Ghandhara Automobiles Limited (PSX: GAL) posted a profit of Rs405.7 million [EPS: Rs7.12] for the first quarter of FY25, marking a significant turnaround compared to a loss of Rs116.9 million [LPS: Rs2.05] during the same period last year (SPLY). This sharp improvement in profitability was driven by a robust increase in both revenue and other income, signaling a recovery in the company’s operations.
Revenue Surge and Profit Growth
The company’s revenue for Q1FY25 surged by 120.5% year-on-year (YoY), reaching Rs2.22 billion compared to Rs1.01 billion in the first quarter of FY24. Despite an increase in the cost of sales, which rose by 87.5% to Rs1.87 billion, Ghandhara managed to record a gross profit of Rs356.5 million—an impressive improvement from just Rs12.6 million in the corresponding period last year.
Boost from Other Income
A significant contributor to the company’s profitability was a substantial increase in other income, which grew by 4.62x YoY to Rs270.3 million. This additional income provided a critical boost to the company’s financial performance during the quarter.
Expense Management
Ghandhara maintained tight control over its administrative expenses, which declined by 3.3% YoY to Rs61 million in Q1FY25. However, the company saw a slight rise in its distribution costs, which increased by 5.77% to Rs31.33 million. Despite these changes, the overall expense management contributed positively to the company’s bottom line.
Taxation
On the tax front, Ghandhara paid Rs44.35 million in the first quarter of FY25, a significant change from the prior year when it recorded a deferred tax income of Rs6.9 million.
Conclusion
The results show a solid financial recovery for Ghandhara Automobiles Limited, supported by strong revenue growth, effective cost management, and a notable boost in other income. This turnaround from a loss to a substantial profit in Q1FY25 indicates a positive outlook for the company as it moves forward in the fiscal year.
