Wednesday, September 20th, 2017
Home »Brief Recordings » Ghani Glass Limited
Ghani Glass Limited (PSX: GHGL) is one of the front-runners in the glass manufacturing industry of Pakistan. Starting commercial operations in 1992, it has risen to cater to top FMCG and pharmaceutical companies that include the likes of GlaxoSmithKline, Coca-Cola, Abbott and Sanofi-Aventis. Over the years, Ghani Glass has expanded its production capacity and product portfolio to cater to various segments and industries. The production capacity of the company is around 400,000 tons per annum. In addition to local sales, the company also exports its products.

The company dominated local market shares with GHGL enjoying 86 percent market share in the pharmaceutical glass container market, 73 percent in food and beverages glass containers and 71 percent in float glass. Ghani's plants were the first one in Pakistan to get ISO 9001:2000 and 14001 certifications. Recently these plants have achieved ISO 9001:2008 and 14001:2 certifications as well.

Historical performance: GHGL has a proven track record of posting robust operational and financial performance over the past several years. The growth in sales has clocked in at about 11 percent on average over the past five years, whereas the gross margins have also seen similar growth. Currently, the gross margins of the company hover around 32 percent, which is an 8 percent increase as compared to FY12.

Sales growth for GHGL is highly correlated with the growth in pharmaceutical, FMCG and construction sectors. Therefore, the strong growth in these sectors has resulted in favourable impact on the company's revenues.

GHGL posted an EPS of Rs 9.16 in FY16, registering an increase of almost 57 percent as compared to FY12's EPS of Rs 5.84. Even though net profit margins dipped in FY13, the company has since rebounded to post an impressive 20 percent net profit margin for FY16.

9MFY17 snapshot: GHGL posted a decent 9MFY17 result with revenues increasing 11 percent, while gross profit surged by an impressive 19 percent, on the back of an improve product mix and higher efficiency achieved in the manufacturing process.

The administrative expenses registered an increase of 52 percent, whereas distribution expenses clocked in an increase of 17 percent. The finance cost of the company continues to be negligible making its balance-sheet debt free. The absence of long-term financing has aided the profitability of the company over the years.

Coming to the bottom-line the company posted PAT of almost Rs 1.65 billion, marking a 21 percent increase on a year-on-year basis. In addition, EPS for the period was Rs 7.53 as compared to Rs 6.24 in 9MFY16, whereas the company has also paid a cash dividend worth Rs 11 for the period. The gross and net profit margins were 33 and 17 percent, respectively showing improvement over the previous period.

During the quarter, the company also finalised plans to set up a new float line, which will have a production capacity of 450 tons per day (extendable to 500 tons). The BoD approved rights issue of 90 shares for every 100 held at par value of Rs 10 to finance the project.

Shareholding pattern: The company's shareholding is owned majorly by directors, which own almost half of the company. The general public only holds about 28 percent of the shareholding in the company. The participation of institutions is lacking in the shareholding of the company mainly due to the overall liquidity of the stock.

Share price performance: GHGL has demonstrated quite some volatility over the past year and even though it has outperformed the KSE-100 index for the better part of that period due to a strong third quarter result, the stock has plummeted since May 2017. But that has more to do with the general state of the stock market on account of political jitters and the MSCI effect rather than any change in company fundamentals.

Outlook: The glass manufacturing industry has a good ride ahead with the resurgent growth in infrastructure as well as FMCG sectors. GHGL due to its dominant market share across a variety of product ranges is poised well to take advantage of favourable client conditions in the next few years. The company's plans to add a new float glass line are also indicative of positive internal growth projections, which are being prepared for by increasing production capacity as well as quality.


Ghani Glass 9MFY2017 Snapshot


Rs(mn) 9MFY17 9MFY16 YoY


Sales 9,507 8,546 11%

Cost of sales 6,364 5,915 8%

Gross profit 3,142 2,630 19%

Administrative expenses 439 289 52%

Distribution expense 552 471 17%

Other expenses 156 133 17%

Other income 47 38 24%

Profit from operations 2,041 1,774 15%

Finance cost 0.7 0.27 159%

Share of profit from Associate 74 77 -4%

Profit before tax 2,108 1,824 16%

Taxation 457 456 0%

Profit after tax 1,651 1,368 21%

EPS (basic and diluted) 7.53 6.24 21%

GP Margin 33% 31% up 200 bps

NP Margin 17% 16% up 100 bps


Source: Company Accounts


Pattern of Shareholding (As of June 30, 2016)


Shares percentage


Directors, CEO, and their Spouses and minor children 121,327,553 55.33%

Associated Companies, Undertakings and related parties 149,068 0.07%

NIT and ICP 891 0.00%

Mutual Funds and Modarabas 1,882,417 0.86%

Insurance Companies 1,076,678 0.48%

Banks, DFI, NBFC, & Pension Funds 333 0.00%

General Public 62,147,026 28.30%

Others 32,642,905 14.85%


Source: Company Accounts

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