HCAR’s profit jumps 46.8 percent in April-September

Karachi: Honda Atlas Cars Pakistan Limited (HCAR) posted a 46.8 percent growth in profit to Rs3.7 billion in the six-month period ended September 30, translating into earnings per share (EPS) of Rs25.94, a bourse filing said on Wednesday.
HCAR recorded Rs2.5 billion in net income, equivalent to EPS of Rs17.67 during the same period a year earlier, a notice to Pakistan Stock Exchange said.
The company’s financial year starts from April and ends in March.
The auto assembler’s revenue soared 68.9 percent to Rs43.95 billion in April-September 2017 as compared to the corresponding period a year ago.
Analyst Hamdan Altaf at Taurus Securities Ltd. said the massive increase in revenue was due to a 55 percent surge in sales to 8,405 units and a 7.8 percent rise in sale price across all the models.
Altaf also attributed the revenue jump to introduction of high-end sports utility vehicle BR-V during the period. The company sold 4,230 BR-V units during the period under review.
Analyst Yawar Saeed at First Capital Equities said the company recorded a profit of Rs1.6 billion with EPS of Rs11.3 in the July-September quarter, up 10 percent year-on-year on the back of a 56 percent annual growth in volume.
“Gross margins receded, which we believe is on the back of rising steel prices and higher proportion of low variants in sales,” Saeed said.
Effective tax rate clocked in at 38 percent during the quarter due to super tax recognised in the period.
“HCAR is currently trading at price earnings of 8.6x,” the analyst of First Capital added. “We have a buy call on the scrip with a target price of Rs823/share.”