PACRA Maintains Entity Ratings of Ghandhara Industries Limited - Press Release issued by The Pakistan Credit Rating Agency Limited.

Lahore -- November 06, 2020 (PPI-OT)

Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)

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Ghandhara Industries Limited (GIL) operates in pickups, trucks and buses segment of the automobile sector. The strength of the company is its alliance with ISUZU - a leading Japanese brand in the country's trucks and buses segment. ISUZU has enabled the company to build a strong fortress in the competitive industry of Pakistan. Covid19 and associated lockdown has worsened the existing economic slowdown which has hampered the overall demand, impacting the business volumes of the company. Yet, the company has managed to restrict its top-line loss to 15% in FY20.

Rising interest rates till Mar20 resulted in significant increase of finance cost which suppressed the company's profitability for the period under review. There has been a considerable reduction in policy rate and this will enhance the profitability of the company in near future. Over the years, the company has improved its ranking and share in the market, however, sustainability of the same is important. It is crucial to sustain the position while managing the rising competition.

The group has built synergies between the two companies operating in the same sector. The...