BUY

⚡ Flash Summary

Ghani Chemical Industries Limited (GCIL) has announced a joint venture with Mari Energies Limited to establish a project company focused on capturing and processing exhaust gases from the Sachal Gas Processing Complex. This initiative, the first of its kind in Pakistan, involves an investment of PKR 14 billion and is projected to produce 80,000 tons of liquefied natural gas (LNG) and 55,000 tons of carbon dioxide annually. The project anticipates generating PKR 17 billion in annual revenue, with significant profitability, and GCIL will hold 49% ownership in the project company.

📌 Key Takeaways

• 🤝 Joint Venture: GCIL partners with Mari Energies Limited for a new project.
• 🏭 Project Focus: Capturing and processing cold-vent/exhaust gases.
• 🇵🇰 First of its kind: The project is the first of its kind in Pakistan.
• 💰 Investment: PKR 14 billion investment in the project.
• 💨 Production Capacity: 80,000 tons of LNG and 55,000 tons of CO2 annually.
• 💸 Revenue Projection: Expected PKR 17 billion in annual revenue.
• ✅ Profitability: Project anticipates substantial profitability.
• 🤝 Ownership: GCIL holds 49% shares in the project company.
• 👤 CEO Appointment: Mr. Hafiz Farooq Ahmad to be the first CEO of the project company.
• 🏦 Financing: A significant portion of the project cost will be financed through supplier’s credit.
• 📅 Announcement Date: Board approval on November 19, 2025.

🎯 Investment Thesis

BUY. The joint venture with Mari Energies Limited and the establishment of the new project company present a compelling growth opportunity for GCIL. The potential revenue of PKR 17 billion and the expected profitability could significantly enhance the company’s earnings. A price target of PKR 45, with a time horizon of 18 months, is justified based on the project’s potential impact on GCIL’s financial performance.

⚡ Flash Summary

Ghani Chemical Industries Limited (GCIL) reported a strong financial performance for FY2025. Revenue increased significantly year-over-year, driving a substantial increase in profit after tax. The company’s strategic initiatives, including expansion into the LPG sector and a joint venture with Mari Energies, are expected to further increase shareholder value. GCIL’s new 275 TPD ASU Plant at Hattar SEZ commenced operations in April 2025 and is expected to be a cost-efficient contributor to profits. The company is actively mitigating risks through supply chain diversification and renewable energy adoption.

📌 Key Takeaways

• ⬆️ Gross sales increased to PKR 8.739 billion in FY25 from PKR 6.395 billion in FY24.
• ⬆️ Net sales increased to PKR 7.435 billion in FY25 from PKR 5.437 billion in FY24.
• ⬆️ Profit after tax soared to PKR 2.016 billion in FY25 from PKR 786 million in FY24.
• ⬆️ Earnings per share (EPS) surged to PKR 3.92 in FY25 from PKR 1.58 in FY24.
• ✅ EBITDA increased to PKR 3.313 billion in FY25 from PKR 1.865 billion in FY24.
• ✅ EBIT increased to PKR 3.092 billion in FY25 from PKR 1.674 billion in FY24.
• 🏭 The company commissioned its fifth ASU plant at Hattar SEZ in April 2025 with a capacity of 275 TPD.
• 🤝 Entered into a joint venture with Mari Energies Limited to capture and process cold-vent/exhaust gases, expected to generate PKR 17 billion in revenue.
• 🌱 Equity stands at PKR 9.2 billion, driven by retained earnings.
• 💰 Total assets stand at PKR 16.2 billion.
• 🚧 Expansion into the LPG sector is underway with a 450 MT storage and filling plant being established.
• 📉 Long-term loans have been reduced through repayments.
• 🔒 Long-term supply agreements are in place with Attock Refinery and Engro Polymer & Chemicals.

🎯 Investment Thesis

GCIL is a well-positioned player in the industrial and medical gases market in Pakistan. The company’s strong financial performance in FY2025, driven by increased sales and improved operational efficiencies, makes it an attractive investment. The commissioning of the new ASU plant and the joint venture with Mari Energies are expected to drive future growth and profitability. The company’s proactive risk mitigation strategies further enhance its investment appeal. We recommend a BUY rating with a price target of PKR 50 based on a P/E of 12.75x with FY25 EPS and assuming a discount rate of 15% over the next 12 months.