📈 GCIL: BUY Signal (8/10) – Transmission of 1st Quarterly Accounts – GHANI CHEMICAL INDUSTRIES LIMITED

📌 Key Takeaways

• 🚀 Sales increased to Rs. 2,169 million from Rs. 2,037 million, a ~6.5% increase YoY.
• 📈 Gross profit surged to Rs. 909 million from Rs. 636 million, representing a ~43% increase YoY.
• 💰 Profit after taxation jumped to Rs. 528 million from Rs. 303 million, a ~74% increase YoY.
• ⭐ Earnings per share (EPS) rose to Rs. 0.93 from Rs. 0.61, a ~52% increase YoY.
• 🏭 Enhanced operational efficiency and optimized plant performance boosted profitability.
• 🎯 Focus on process improvement and higher capacity utilization contributed to lower per-unit production costs.
• 🌱 The company is expanding into new business areas, establishing a 450 MT capacity LPG Storage and Filling Plant.
• 🤝 GCIL has signed an MOU with a leading Pakistani energy company for capturing and processing cold vent/exhaust gases, promoting sustainability.
• 💸 Distribution costs significantly increased to Rs. 132.6 million from Rs. 39.48 million.
• 💼 Administrative expenses also rose to Rs. 85.9 million from Rs. 64.4 million.
• 🏦 Finance costs increased to Rs. 137.777 million from Rs. 114.794 million.
• 💹 Net cash used in operating activities stood at (Rs. 37.513) million compared to Rs. 327.191 million generated last year.
• 👍 Basic/diluted combined earnings per share is Rs. 0.93 compared to Rs. 0.61 previously.

🎯 Investment Thesis

GCIL is a BUY. The company’s strong Q1 2025 performance, driven by increased sales and improved profitability, demonstrates effective management and operational efficiencies. The expansion into new business areas, along with sustainability initiatives, positions the company for future growth. However, the negative operating cash flow needs to be monitored closely.