Karachi, December 22, 2021 (PPI-OT): GHGL and GVGL: Steadily expanding portfolios
Ghani Glass Limited (GHGL) and Ghani Value Glass Limited (GVGL) held their Corporate Briefing Sessions yesterday to discuss FY21 results and outlook.
GHGL is set to enter the tableware segment, competing Tariq Glass Limited (TGL). The management expects the project to achieve COD by the start of FY23 and targets financing through internal cash generation.
The management of GVGL apprised that it has achieved COD of its spectrum line project which is expected to contribute 20% to net sales during FY22.
GHGL – Further diversifying its product portfolio
After achieving 50% market share in the float glass industry recently, GHGL has decided to enter the tableware segment, which is currently dominated by Tariq Glass Limited (TGL). GHGL management shared its plans in yesterday’s Briefing session to finance the upcoming segment through internal cash generation and expects COD by the start of FY23.
GHGL currently manufactures and sells glass containers and float glass. The company has 5 container glass furnaces, 2 in Hattar KPK and 3 in Karachi. It also has 2 float glass furnaces in Sheikhupura with a total segment capacity of 1,000tons/day. The company utilizes gas to operate all its furnaces; where float glass segment is charged at expensive RLNG rates.
After significant market share in other glass segments
GHGL has a noteworthy market share of 95% in the pharmaceutical industry, 96% in the Food and Beverage industry. Post commencement of its second line in Sep-2021, the company’s market share in float glass has doubled from 25% to 50%. GHGL also exports to various countries including Afghanistan, Bangladesh, Nepal and Greece. Some of the company’s major customers include Coca-Cola, Unilever, Pepsi and Nestle.
GVGL catering to different segments
GVGL’s management shared in its Corporate Briefing Session yesterday that it has plans to enter automobile and appliances industries. After completion of the merger of Ghani Automobile Industries Limited (GAIL) into GVGL, the company is yet to decide whether to continue GAIL’s existing operations or utilize it in a different way.
With a plant capacity of 67k tons/annum, GVGL’s product portfolio includes (1) mirrored glass, (2) tempered glass, (3) laminated safety glass, (4) double glazed glass and (5) colour painted glass. A major part of sales (~70%) is based in Punjab, broadly generated from mirror and tempered glass segments.
With enhancement of spectrum line’s capacity
Spectrum line project was completed by the end of FY21, as a result of which the segment’s capacity has now increased by 10%. The management expects it to contribute 20% to the total sales during the ongoing year.
Result recap
GHGL: EPS for FY21 clocked in at Rs3.83/share, reporting an increase of 2x YoY. Higher earnings resulted from 26% YoY higher sales, owing to higher demand from the construction sector compared to last year which was impacted due to slow down. Gross margin during FY21 clocked in at 22.6%, a 7ppts YoY increment. EPS for 1QFY22 came in at Rs1.11/share, a rise of 48% YoY, primarily as a result of volumetric growth and improvement in gross margin.
GVGL: Earnings for FY21 clocked in at Rs 590mn, up by 156%. Net sales jumped 56% YoY, due to addition of multiple products in the mirror and tempered glass segments. Gross margin during FY21 clocked in at 34.8% as against 28.9% during SPLY, up by 5.9 ppts. GVGL posted a PAT of Rs191mn during 1QFY22 against Rs58mn during SPLY.