Honda Atlas Car Pakistan (HCAR) announced a profit after tax (PAT) of Rs. 2.227 billion for 9MMY26 compared to Rs. 1.027 billion in 9MMY25.
The 3QMY26 result showed that the company recorded a profit of Rs. 655 million (EPS of Rs. 4.59), up 16 percent year-on-year (YoY) while down 12 percent quarter-on-quarter (QoQ).
The result came lower than industry expectations due to lower-than-expected gross margins and a higher-than-expected effective tax rate.
Gross margins clocked in at 7.55 percent in 3QMY26 vs 9.219 percent in 3QMY25 and 7.56 percent in 2QMY26. Despite increased sales, gross margins fell compared to last year; however, the margins remained flattish on a QoQ basis. Analysts had expected gross margins at 9 percent.
The effective tax rate clocked in at 45.5 percent in 3QMY26 vs 43.139 percent in 3QMY25 and 33.86 percent in 2QMY26.
Net sales reached Rs. 33.1 billion, up 86 percent YoY and 30 percent QoQ amid higher sales volume, which rose by 92 percent YoY and 47 percent QoQ to 7,159 units.
In 3QMY26, distribution expenses rose 3.1 times YoY and 51 percent QoQ to Rs. 451 million, mainly due to increased volumetric sales.
Administrative expenses increased by 27 percent YoY while falling 5 percent QoQ, while other charges rose 4.9 times YoY and 23 percent QoQ to Rs. 83 million.
Meanwhile, other income surged 97 percent YoY but declined 24 percent QoQ to Rs. 374 million.
This brings 9MMY26 profits to Rs. 2.2 billion (EPS 15.59), up 2.2 times YoY, with gross margins at 7.88 percent vs 7.699 percent in 9MMY25. The effective tax rate stood at 41.20 percent in 9MMY26 vs 43.15 percent in 9MMY25.
The company is currently trading at MY26E/MY27F P/E of 8.5/8.3x.
