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Honda Atlas Cars (Pakistan) Limited (PSX: HCAR) has announced its financial results for the third quarter of the fiscal year 2025 (3QMY25), reporting a profit of Rs. 566 million. The latest sales figures show an impressive increase of 2.95 times compared to last year and a remarkable 2.2 times more sales than the previous period.
For the first nine months of FY25, the company reported a profit of Rs. 1.03 billion, marking a 7% rise compared to the Rs. 964 million profit recorded in 9MMY24. The outcomes surpassed what the industry anticipated. Topline Securities reports that the impressive earnings performance in 3QMY25 is due to gross margins that exceeded expectations, reaching 9.2% compared to the forecasted 8.3%. The gross margins for 3QMY25 have surpassed those of 3QMY24, which stood at 8.3%, and also exceeded the 7.4% recorded in 2QMY25.
Distribution expenses experienced a notable decrease of 20% year-over-year and 19% quarter-over-quarter, totaling Rs. 147 million. Meanwhile, other operating expenses plummeted by 72% year-over-year and 74% quarter-over-quarter, reaching Rs. 17 million, which further boosted earnings. This is primarily a result of a notable decrease in overall inflation.
In the third quarter of MY25, net sales experienced a remarkable increase of 44% year-over-year and 8% quarter-over-quarter, reaching Rs. 17.8 billion. Administrative expenses saw a year-over-year increase of 15% and a quarter-over-quarter rise of 4% , reaching Rs. 457 million. Other income decreased by 34 % year-over-year, while it increased 2.24 times quarter-over-quarter to Rs. 190 million in the third quarter of MY25. The decrease can be attributed to reduced delivery times for vehicles.
The effective tax rate was recorded at 43% for the third quarter of MY25, an increase from 37% in the third quarter of MY24 and 40% in the second quarter of MY25. The company reported earnings per share (EPS) of Rs. 3.97 for the third quarter and an EPS of Rs. 7.19 for the first nine months. HCAR is presently trading at a PE of 26.35x for MY25E and 14.38x for MY26F, with dividend yields of 2% and 3% , respectively.
