GOC (Pak) Limited: Resilience in Sports Goods Manufacturing

GOC (Pak) Limited, a prominent name in the sports goods manufacturing sector, was established in Pakistan in 1964 as a private limited company. It transitioned to a public limited company in 1986, marking a significant milestone in its journey. The company specializes in producing high-quality cricket balls, hockey sticks, and various other sports equipment. As of June 30, 2024, GOC has 7.349 million shares outstanding, held by 329 shareholders. A substantial portion of these shares, approximately 47.59 percent, is owned by associated companies and related parties, while directors, the CEO, and their families hold 28.30 percent. The local general public owns 17.04 percent, with the remaining shares distributed among institutions and banks.

Over the years, GOC's financial performance has exhibited a fluctuating trend. The company experienced notable growth in its topline and bottom line during 2019, 2022, and 2023. However, the years 2020, 2021, and 2024 were challenging, with significant declines in revenue and net profit. In 2019, GOC's topline surged by 27.6 percent year-on-year, driven by increased export sales and favorable currency movements. Despite a drop in local sales and a rise in raw material costs, the gross profit margin improved to 36.76 percent, up from 34 percent in 2018.

Operating expenses rose due to inflation and enhanced branding strategies, while other income saw a remarkable increase of over 3029.74 percent, significantly boosting the operating profit. The bottom line reflected an impressive growth of 171.96 percent, reaching Rs.71.53 million, with an earnings per share (EPS) of Rs.9.73.

However, the subsequent years were marked by a downturn. The impact of the COVID-19 pandemic led to a drastic decline in sales volumes, resulting in a 15.76 percent drop in topline in 2020 and a further 20.40 percent in 2021. The gross profit margin also contracted during these years, highlighting the challenges faced by the company. Administrative expenses surged in 2020 due to a bonus disbursement, but they fell in 2021. Other income dwindled, contributing to a significant reduction in net profit, which fell to Rs.5.72 million in 2021, the lowest in the analyzed period.

In 2022, GOC made a strong recovery, with a 16.4 percent growth in topline as international sports resumed post-pandemic. The gross profit improved by 30.33 percent, aided by increased sales volumes and favorable exchange rates. Operating profit soared by an astonishing 914.92 percent, achieving an operating profit margin of 43.31 percent, the highest in the company's history.

GOC (Pak) Limited's journey reflects the resilience and challenges faced by businesses in the sports goods sector. While the company has shown remarkable growth in certain years, it has also encountered significant hurdles, particularly during the pandemic. As GOC continues to navigate the complexities of the market, its ability to adapt and innovate will be crucial for sustaining growth and profitability in the future. Investors and stakeholders will be keenly watching how GOC leverages its strengths to overcome challenges and capitalize on opportunities in the evolving sports industry.