AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Honda Atlas Car Pakistan (HCAR) has reported a significant rise in its second-quarter profits for the fiscal year 2026, with earnings per share (EPS) reaching Rs5.2, marking a 2.9-fold increase year-over-year. Despite this substantial growth, the results fell short of industry expectations due to lower-than-anticipated gross margins.
The company’s gross margins for the quarter stood at 7.6%, an improvement from the same period last year but a decline from the first quarter of this fiscal year. This fluctuation was attributed to a recovery in the auto sector and increased sales volumes, although quarter-over-quarter margins dipped.
HCAR’s net sales for the quarter amounted to Rs25.4 billion, representing a 53% rise year-over-year, driven by a 46% increase in sales volume, totaling 4,880 units. However, this figure is a 4% decline from the previous quarter, primarily due to a 12% reduction in unit sales.
The company experienced a 65% year-over-year increase in distribution expenses, reaching Rs298 million, though this figure decreased by 15% compared to the previous quarter. Administrative expenses also rose by 40% year-over-year and 2% quarter-over-quarter.
Other income saw a significant year-over-year surge of 5.9 times, amounting to Rs496 million, although it declined by 11% from the previous quarter. The effective tax rate for the quarter was recorded at 33.86%, a decrease from both the prior year and the first quarter of this fiscal year.
For the first half of fiscal year 2026, HCAR’s profits reached Rs1.6 billion, with an EPS of 11.0, reflecting a 3.4-fold increase year-over-year. The company’s gross margins for this period stood at 8.08%, compared to 6.84% in the previous year’s first half.
Analysts have maintained a hold stance on HCAR, noting that the company is currently trading at a projected price-to-earnings ratio of 9.2 for the current fiscal year and 9.0 for the next, with a dividend yield of 4%.