Honda Atlas Cars Sees Profit Surge Amid Lower Steel Prices

Lahore: Honda Atlas Cars Pakistan Limited (HCAR) reported a significant rise in profit for the fourth quarter of the fiscal year MY25, as the company benefited from declining steel prices and increased sales volumes. The company announced a profit after tax of PKR 1.7 billion, compared to PKR 1.4 billion in the same period last year. This improvement was largely attributed to higher volumetric sales and enhanced margins due to reduced prices of cold-rolled and hot-rolled coils.

The revenue for the quarter reached PKR 27.7 billion, marking an 11% increase from the previous year. This growth was driven by the sale of 5,653 units, up from 5,044 units in the year-ago quarter. The company’s gross margins improved to 10.1% from 8.4% in the prior year, supported by a favorable sales mix and a 15.1% year-over-year decline in steel prices.

Despite the profit surge, administrative and distribution expenses rose by 42% to PKR 1.1 billion, which may be linked to increased spending on advertising and promotion. Other income also saw a significant jump, reaching PKR 370 million, a 125% increase due to a substantial rise in short-term investments.

Financial charges experienced a decline of 43% to PKR 346 million, influenced by lower financing rates and the absence of short-term borrowings, as the company’s working capital needs eased. Cash and equivalents stood at PKR 5.6 billion as of March 2025.

Looking ahead, AKD Securities Limited has issued a ‘BUY’ recommendation for HCAR, with a target price of PKR 426 per share by December 2025. However, potential changes in tariff regulations in the upcoming budget could affect the price competitiveness between imported and locally assembled cars, which may impact the company’s gross margins.