Karachi: The Ghandhara Tyre and Rubber Company Limited has released its unaudited condensed interim financial statements for the first quarter ending on September 30, 2026. The company has faced significant financial challenges during this period, attributed mainly to escalating production costs and competitive market pressures.

Reported on October 30, 2026, the economic conditions in Pakistan have been challenging, with inflation averaging at 10.2% and the State Bank of Pakistan's policy rate maintained at 11.5%. These factors have significantly increased industrial production costs and affected consumer purchasing power. The domestic tyre industry, in particular, has struggled with rising production expenses and competitive pressures from low-cost imported tyres. Although passenger car sales in the automobile segment rose by approximately 43% compared to the same period last year, the benefits of this growth were offset by high energy costs and volatile raw material prices.

The company's net sales for the first quarter reached 4,398 million rupees, reflecting a growth of approximately 17.3% from 3,749 million rupees in the corresponding period last year. However, the cost of sales surged by approximately 33.4%, from 3,155 million rupees to 4,210 million rupees, leading to a decline in gross profit to 188 million rupees from 594 million rupees. Consequently, the gross margin contracted to 4.3%, negatively impacting the company's overall profitability.

According to information available from the Pakistan Stock Exchange (PSX), the Ghandhara Tyre and Rubber Company reported an operating loss of 85.9 million rupees, a significant downturn from an operating profit of 335.5 million rupees in the same period last year. The loss per share was recorded at 3.17 rupees, compared to earnings per share of 0.24 rupees in the previous year.

The increased cost of sales and per-unit costs were primarily driven by global supply chain disruptions, including regional geopolitical tensions and typhoon-related disruptions in China. These factors delayed the arrival of essential raw materials, constrained production volumes, reduced operational efficiency, and increased production costs.

Overall, the company's financial performance in the first quarter of 2026 highlights the significant challenges faced by domestic tyre manufacturers amid a volatile economic environment and competitive market conditions.