Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has upgraded the entity ratings of Ghandhara Automobiles Limited (GAL), a key player in Pakistan's automobile sector, citing the company's strengthened business and financial profile. The upgrade comes in light of GAL's sustained revenue growth for the second consecutive year, improved profitability, and increased market share in the truck and pickup segments.

According to PACRA, GAL, operating under the Bibojee Group of Companies, has leveraged strategic collaborations with global automotive brands such as Anhui Jianghuai Automobile Co. Ltd. (JAC Motors), Dongfeng, and Renault Trucks to enhance its product offerings. The company has reported significant sales volume growth, with a ~61% year-on-year increase in FY26, supported by lower interest rates and stable exchange rates. GAL's market share for trucks rose to ~10% in FY26, while its share in the light commercial vehicle category increased to ~23%.

The company's financial performance has also seen an upward trajectory, with consolidated revenue reaching approximately PKR 47.0 billion in FY26, up from PKR 34.5 billion in the previous fiscal year. GAL's gross and net margins improved, and its bottom line grew to ~PKR 6.4 billion, benefiting from a higher share of profit from its associate, Ghandhara Industries Limited. Operating at a near debt-free position, GAL's financial risk profile is characterized by strong cash flows, despite a lengthened working capital cycle.

Looking ahead, GAL plans to expand its product lineup with the introduction of a Plug-in Hybrid Electric Vehicle (PHEV) variant in January 2027, while continuing to upgrade its manufacturing capabilities, including a Robotics Top Coat Line at their Paint Shop. The company's ability to maintain growth in revenue and profitability, coupled with effective competition management, will be crucial for sustaining its ratings.