GVGL to enter in automobile sector

December 23, 2021 (MLN): In order to diversify and expand its business operations, Ghani Value Glass Limited (PSX: GVGL) is planning to enter the automobile and appliances industries which could prove to be a major revenue growth driver for the tempered glass segment, the management of the company informed while holding a corporate briefing session.

Apprising investors of the financial performance of the company during FY21, the management underlined that net sales increased 56%YoY to Rs2.5 billion, where revenue growth was witnessed across the entire product portfolio.

It is pertinent to mention that local sales made up a major portion of GVGL’s revenues, contributing 99.9%, meanwhile the export sales declined 52.5% YoY.

Moreover, the gross margins of the Company also improved YoY by 6ppts to 34.8%, despite the rising cost of fuel and power.

GVGL’s capacity utilization during FY21 also improved due to recovery in demand post-pandemic slowdown. However, the utilization remains low due to low demand. 32% (FY20: 26%) in mirrored glass and 38% (FY20: 34%) in laminated glass, briefing takeaways covered by Taurus Securities noted.

The management also informed that it has utilized the proceeds from the right issue on the appliances business segment and to increase production from the existing spectrum line during FY21. Initially, GVGL had planned to install a second spectrum line from the proceeds, which was not executed due to COVID-19.

Nevertheless, the production capacity of the existing spectrum line increased by over 10% and the Company also entered the appliance business segment catering to brands like Gree, Dawlance, Waves, etc.

Taurus Securities also underlined that the company had proposed a scheme of arrangement for the merger of Ghani Automobile Industries (GAIL) with GVGL which was allowed was allowed by Lahore High Court on September 6, 21.

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