AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Honda Atlas Cars (Pakistan) Ltd. presented a robust performance in its MY25 results, as disclosed during its recent analyst briefing. The company experienced a 42% increase in topline revenue, reaching PkR78 billion from PkR55 billion the previous year. This growth was largely driven by a 53% rise in volumetric sales, which totaled 16,100 units compared to 10,534 in the same period last year.
The company’s gross margins also saw an improvement, clocking in at 8.5% for MY25, a slight rise from 8.2% in MY24. This improvement was attributed to the relative stability of the currency during the period. Earnings for the year amounted to PkR2.7 billion, translating to an EPS of PkR19.0, marking a 16.6% increase from the previous year’s earnings of PkR2.3 billion (EPS: PkR16.3).
Honda Atlas Cars benefitted from a favorable effective tax rate of 17.27% due to tax benefits claimed during the year, significantly boosting the company’s bottom line. The management highlighted that the sales mix for Honda City was dominated by the 1.2L variants at 75%, with the remaining 25% being 1.5L variants.
The overall passenger car market in Pakistan saw a 67% year-on-year increase in volumes, reaching 125,533 units. This surge was attributed to improving macroeconomic conditions. Looking ahead, the company projects a further increase in sales volumes by approximately 40-50% year-on-year in MY26.
In a bid to diversify its offerings, Honda Atlas Cars has pre-launched a hybrid version of the HR-V, offering test drives at dealerships nationwide. The company is absorbing the NEV levy tax on this new variant, introducing it at a competitive price. Management expects to sell between 400-500 units per month of the newly launched vehicle.
The company reported localization levels for its Civic, City, BR-V, and HR-V models at 64%, 74%, 52%, and 61%, respectively. Additionally, 38 units of the 1.2L City were exported to Japan during MY25.
Despite anticipated challenges from currency devaluation, the management remains optimistic about future margins. The upcoming NEV policy, however, offers incentives only for plug-in hybrid and electric vehicles, excluding hybrids like the newly launched HR-V.
Honda Atlas Cars maintains a positive outlook with a ‘BUY’ stance, backed by favorable macroeconomic indicators, falling financing rates, presence in the hybrid electric vehicle segment, and stable margins due to declining CRC/HRC prices, with a target price of PkR451 per share by June 2026.