Honda Atlas Profit Up 4 Times in 1QMY26

Staff Report
Honda Atlas Cars Pakistan (HCAR) posted a net profit of Rs828 million for the first quarter of MY26, translating into earnings per share (EPS) of Rs5.8 — up 4.1 times year-on-year but down 51% on a sequential basis.

The earnings fell short of market expectations as margins remained under pressure and the tax outgo exceeded estimates.

Gross margins improved to 8.6% in 1QMY26 from 6.3% in the same period last year, supported by higher sales volumes and improved sector dynamics. However, the figure still came in below the previous quarter’s 10.1%, dragging down profitability.

Sales Rise on Unit Growth

Net sales rose 66% year-on-year to Rs26.5 billion, driven by a 68% jump in unit sales to 5,520 vehicles. On a quarter-on-quarter basis, sales dipped 4% as volumes declined slightly.

Honda Atlas Profits Surge in 3QMY25, Beating Expectations!

Tax Impact and Cost Escalation Weigh on Bottom Line

The effective tax rate remained elevated at 43.3% — down from 47.1% last year but higher than the 39% recorded in the previous quarter. Admin costs surged 54% YoY, while distribution expenses rose 35% YoY due to higher sales. Other income provided some relief, increasing 61% YoY and 49% QoQ to Rs553 million.

HEV HR-V Launch May Lift Earnings

The company is banking on the recent launch of its hybrid HR-V e\:HEV model to bolster volumes and margins in the upcoming quarters. Management expects the new variant to support profitability as demand for hybrids grows amid rising fuel costs.

Valuation & Recommendation

At current levels, HCAR is trading at a forward P/E of 11.6x for MY26E and 10.5x for MY27F, with an estimated dividend yield of 4%. We maintain a Hold stance on the stock, awaiting more clarity on margin recovery and sales momentum in the second half.