Honda Atlas reports strong Q3 earnings growth

KARACHI: Honda Atlas Cars Pakistan announced its financial results for the third quarter of MY25, reporting a profit of Rs566 million (EPS: Rs3.97), reflecting a significant increase of 3.95 times year-on-year (YoY) and 2.2 times quarter-on-quarter (QoQ).

According to Myesha Sohail at Topline Securities, the company’s earnings surpassed industry expectations, primarily driven by improved gross margins of 9.2 per cent, higher than the projected 8.3 per cent, and well above the 8.3 per cent recorded in Q3MY24 and 7.4 per cent in Q2MY25.

A notable decline in distribution expenses, which fell by 20 per cent YoY and 19 per cent QoQ to Rs147 million, alongside a sharp drop in other operating expenses by 72 per cent YoY and 74 per cent QoQ to Rs17 million, further bolstered the earnings. The reduction in expenses is attributed to a significant decrease in overall inflation.

For the nine-month period ending MY25, Honda Atlas posted earnings of Rs1.03 billion (EPS: Rs7.19), marking a 7.0 per cent YoY increase from Rs964 million (EPS: Rs6.75) in the same period last year. Net sales rose 44 per cent YoY and 8.0 per cent QoQ to Rs17.8 billion in Q3MY25, supported by a rise in unit sales to 3,736 units compared to 2,374 units in Q3MY24 and 3,348 units in Q2MY25.

Administrative expenses increased by 15 per cent YoY and 4.0 per cent QoQ to Rs457 million, while other income declined 34 per cent YoY but surged 2.24 times QoQ to Rs190 million, largely due to shorter car delivery times. The effective tax rate for Q3MY25 stood at 43 per cent, compared to 37 per cent in Q3MY24 and 40 per cent in Q2MY25.