Ghandara Tyre & Rubber Company Limited reported earnings per share of PKR 1.88 in FY24 against a loss per share of PKR 1.37 in FY23, depicting an increase of 237%.
The company saw its gross margins increase to 16% in FY24 from 15.3% in FY23 on the back of easing commodity prices. GTYR is in the process of executing its solar energy agreement with KE for 2MW and expects this to be up and running by March 2025.
The company has also begun supplying 17-inch tyres to OEMs and excavator and OTR tyres in the replacement market. The management was of the opinion that lower sales in the first quarter of this year were due to lower farm sales as a result of the wheat price crash affecting rural demand.
The company has recently entered into a 7-year technical services agreement with Shandong Huasheng Rubber Company Limited as a replacement for Continental Global Holding Netherlands B.V.
The management is hopeful that this new partner will be able to provide newer designs and technology with faster testing services as their testing facility is operational all year. The new partner operates in over 100 countries with annual sales of over a billion dollars.
Management estimated that its two largest product segments are farm tyres and passenger car tyres with them contributing two thirds of revenue.
GTYR is in the process of scouting for export markets and is currently visiting exhibitions. The company plans to focus more on the replacement and export markets as they provide stable revenues.
It was also revealed that the company is now supplying tyres for the Corolla Cross as well as Honda HR-V and is collaborating with OEMS for more SUV and crossover tyres.
In this regard the management apprised that for large scale production of larger tyres such as 18-inch capex will be needed.
Previously due to the high cost of borrowing this project had been on hold but now, with the expected drop in interest rates management expects that this project can be started soon.
Going forward, the management expects lower borrowing costs to support profitability and the change in parent to lead to a gradual positive impact as well.
The company plans to make further inroads with exports and OTR and excavator tyres. They are also in the process of developing EV tyres and hope they will be able to enter this segment in the future.
Management also expects margins to remain stable as long as the exchange rate and oil prices remain stable.
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