Ghandhara Automobiles to reach Rs765 per share by June 26

August 15, 2025 (MLN): Ghandhara Automobiles Limited (PSX: GAL) is all set for a June 2026 target price of Rs764.7/share, implying an upside potential of 40.1% from the last closing price of Rs531/share.

In its newly initiated coverage, Arif Habib Limited (AHL) has issued a ‘Buy’ call on GAL, projecting a sharp acceleration in profitability with earnings per share (EPS) estimated at Rs66.4 in FY25e and Rs96.55 in FY26f as the full impact of the JAC-T9 Hunter comes through.

Rising economic activity and large-scale development projects are also poised to spur demand for commercial vehicles, driving growth for both GAL and its associate, Ghandhara Industries Limited (GHNI), in which it holds a 17.91% stake.

The earnings outlook is supported by multiple levers high EPS contribution of Rs46.6/share in FY26 from projected sales of 3,200 units of the JAC-T9 Hunter; continued growth in light commercial vehicles 25% and in the medium and heavy-duty truck segment 15% in FY26; and strong earnings of Rs11.2/share in FY26 from GHNI, which commands a 67% share in the truck market.

At just 5.7x FY26 P/E, GAL is being traded well below historical and sector averages.

The JAC-T9 Hunter represents GAL’s first move into Pakistan’s premium pickup segment, traditionally dominated by Toyota’s Revo. Competitive pricing and advanced features drove such strong demand that bookings were briefly suspended before resuming.

AHL projects average monthly sales of 267 units in FY26, translating into significant EPS gains.

Meanwhile, the commercial trucks segment is gaining momentum, supported by the economic revival, increased trade activity, and large-scale development projects.

Major infrastructure and resource projects will further boost truck demand notably the Reko Diq copper-gold project, one of the world’s largest untapped mineral deposits.

With Phase 1 targeted for 2028 and Phase 2 by 2034 doubling capacity to 90 Mtpa, the project is expected to generate sustained demand for heavy-duty trucks, specialized haulage, and efficient carriers.

 This offers GAL and GHNI growth prospects not only in vehicle sales but also in maintenance, spare parts, and logistics partnerships.

GAL is expected to see a 25% increase in JAC light commercial vehicle sales and 15% growth in JAC truck sales in FY26, that’ll show renewed market confidence.

GHNI remains a key earnings source for GAL. In FY25, GHNI’s truck sales rose 2.3x and bus sales increased 2.4x, with FY26 forecasts of 15% growth in trucks and 10% in buses expected to contribute meaningfully to GAL’s bottom line.

With these factors combined, GAL’s profitability is set to shift into high gear, supported by dividend payouts of Rs5/share in FY25e and Rs7/share in FY26f, according to AHL.

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