Ghandhara Tyre and Rubber Co. Reports Decline in Revenue Amidst Rising Costs

Karachi: Ghandhara Tyre and Rubber Company Ltd. (GTYR) hosted an analyst briefing to discuss its financial performance for the fiscal year 2025 and the first quarter of fiscal year 2026, revealing a notable decline in revenue and profitability. The company reported a topline of PkR17.8 billion for FY25, a decrease from PkR20.5 billion in the same period last year, attributing the decline to reduced farm tyre sales influenced by challenging farm economics.

The company’s financial results showed a loss of PkR970 million for FY25, a significant reversal from a profit of PkR241 million in FY24. The loss was primarily driven by a reduction in gross margins, which fell to 13% from 16% in the previous year, due to increased costs of raw materials, higher gas prices, and wage costs.

Finance costs for FY25 were reported at PkR1.4 billion, a reduction from PkR1.7 billion in the prior year, largely due to lower financing rates. However, the first quarter of FY26 showed a slight improvement with earnings rising to PkR29 million, up 38% year-on-year, attributed to reduced finance costs.

In response to the challenging market conditions, the government has introduced measures like the Kissan Card to provide subsidized loans, aimed at boosting farmers’ liquidity and thereby supporting the purchase of agricultural inputs, including tyres.

The company’s management remains focused on innovation, with plans to introduce new sizes and designs for both the OEM and replacement market segments. They anticipate revenue growth in the coming quarters, aided by improved crop yields following recent floods.

Looking ahead, GTYR management expects a marginal growth in gross margins for FY26 and foresees an improvement in demand due to declining auto financing rates, which could positively impact the company’s financial performance.