Karachi: Ghandhara Automobiles Ltd (GAL) is poised for a significant earnings boost, driven by a surge in demand for commercial vehicles and strategic business developments. The company has raised its earnings forecasts for fiscal years 2026 and 2027, attributing the increase to a 112% year-on-year rise in commercial vehicle demand over the first ten months of fiscal year 2026 and improved profit margins. Additionally, GAL anticipates a higher contribution from its associate company, GHNI, and plans to launch a plug-in hybrid electric vehicle (PHEV) variant of the JAC-T9 in early fiscal year 2027.

According to JS Global, the upward revision in earnings has led to an increase in GAL's target price to Rs860, with the target valuation extended to June 2027. Despite a 45% increase in the stock price following a ceasefire announcement, GAL shares remain 11.5% below their peak pre-conflict levels, offering an attractive valuation at 3.9x and 3.8x earnings for fiscal years 2026 and 2027, respectively. The fiscal year 2027 budget presents a mostly neutral impact on GAL, with a 2% reduction in super tax slightly boosting earnings. However, the removal of concessional sales tax on PHEVs presents both a challenge and an opportunity, affecting pricing strategies for new and existing models.