Honda Atlas Profit Jumps by 300% Increase
Honda Atlas reports a 300% profit surge in Q3 MY25, driven by 44% sales growth, cost efficiency, and improved margins, despite industry challenges.
The automotive industry in Pakistan continues to face challenges, with fluctuating sales trends making it tough for carmakers to maintain stability. Despite these hurdles, Honda Atlas Cars Pakistan has achieved a remarkable milestone, reporting a massive profit jump in the third quarter of the Market Year 2025 (MY25).
Profit Highlights
Honda Atlas recorded a profit of Rs. 566 million for Q3, reflecting a 295% year-on-year (YoY) increase. Compared to the previous quarter, the profit rose 2.2 times, exceeding market expectations. For the nine months ending MY25, Honda’s total profit reached Rs. 1.03 billion, a 7% increase YoY from Rs. 964 million last year.
The gross margin for Q3 improved significantly, climbing to 9.2% compared to 8.3% last year and 7.4% in the previous quarter.
Key Growth Drivers
Several factors contributed to this impressive growth:
- Net Sales Growth: Sales surged by 44% YoY, reaching Rs. 17.8 billion. This was driven by increased unit sales, which grew to 3,736 vehicles, compared to 2,374 units sold in the same quarter last year.
- Cost Efficiency: Distribution expenses dropped by 20% YoY, and operating expenses fell by 72% YoY, helped by lower inflationary pressures.
- Rebounding Income: Other income, although 34% lower YoY, rebounded by 2.24 times QoQ, contributing to the overall profit boost.
Challenges
While the quarter showed strong performance, some challenges persisted:
- Rising Administrative Costs: Administrative expenses increased by 15% YoY.
- Higher Taxation: The effective tax rate rose to 43%, up from 37% last year.
Despite these hurdles, Honda’s growth momentum remains strong, with earnings per share (EPS) of Rs. 3.97 for Q3 and Rs. 7.19 for the nine months.
Sales Performance
Honda Atlas maintained stable sales figures last month, selling 1,110 units in December 2024, compared to 1,112 units in November 2024. The breakdown includes:
- City and Civic: 970 units sold.
- BR-V and HR-V: 140 units sold.
Looking Ahead
Honda Atlas’s strong Q3 performance highlights its ability to deal with challenges in Pakistan's competitive automotive market. With improved margins, efficient cost management, and steady sales, the company is well-positioned for sustained growth in the coming quarters.
