Earnings Preview: HCAR’s earnings expected to nosedive in 3QFY19 due to drop in volumes

January 23, 2019 (MLN): Atlas Honda Cars (HCAR) is scheduled to announce its financial results for 3QMY19 (March Year End) on Thursday, January 24, 2019.

Based on market expectations, the consensus on HCAR’s profit after tax for 9MMY19 turns out to be clocked in between Rs.2530 million to Rs.29655 million with EPS ranging from Rs.17.7 to Rs.20.8.  While in 3QMY19, the company is likely to post a profit in between Rs.449 million to Rs.884 million with EPS ranging from Rs.4.32 to Rs.6.2.

Listed below are the forecasts of the different research houses:

Brokerage House

Expected Profit After Tax (PAT)

 

 

3QMY19

%Change YoY

9MMY19

%Change YoY

JS Global

PKR 807 million

(EPS: PKR 5.65)

 down by 22%

PKR 2,888 million (EPS: PKR 20.22)

down by  44%

Arif Habib Limited (AHL)

PKR 449 million

(EPS: PKR 3.14)

down by 68%

PKR 2,530 million (EPS: PKR 17.71)

down by 51%

Pearl Securities Limited

PKR 746 million

(EPS PKR 5.22)

down by 47%

PKR 2,827 million (EPS: PKR 19.80)

down by 45%

Next Capital

PKR 739 million

(EPS: PKR 5.17)

down by 47.8%

PKR 2,820 million (EPS: PKR 19.75)

down by 45%

BIPL Securities

PKR 0.7 billion

(EPS: PKR 4.9)

down by  51.1%

PKR 2.8 billion

(EPS: PKR 19.4)

down by 45.8%

Ismail Iqbal Securities (Pvt.) Limited

PKR 617 million

(EPS: PKR 4.32)

 down by 40%

 PKR 2,698 million (EPS: PKR 18.89)

down by 47%

Inter Market Securities

PKR 457mln

(EPS: PKR 3.20)

down by 68%

Elixir Securities

PKR 884 million

(EPS: PKR 6.2)

down by 38%

PKR 2,965 million (EPS: PKR 20.8)

down by 42%

Spectrum Securities Limited

PKR 797million

(EPS: PKR 5.58)

down by 43.7%

PKR 2,878 million (EPS: PKR20.15)

down by 44%

Speaking with Mettis Link News Mr. Arsalan hanif, at Arif Habib Limited briefed that owing to increase in input cost given increase in duties on key inputs and PKR depreciation of 26% during 9MMY19 which the company wasn't able to pass on to the customers in full, this time the company is expected to face plunge in profits.

Moreover, AHL expects the company’s topline to go up by 8% YoY attributed to 3% YoY increase in sales units to 36,759 vis-à-vis 35,824 units in 9MMY18 along with higher prices up to an average of 10-15%.

Another research house, JS global expects HCAR’s profits after tax for 3QMY19 to decline by 22% mainly due to 19.5% QoQ drop in volumes.

Explaining further, Mr. Talha Idrees at Ismail Iqbal Securities told Mettis Link News that in order to pass on previous devaluation impact, the company jacked up its vehicles prices in October’18 which led to decline in sales due to early buying seen in previous month upon anticipated price hike which will result in decline in company’s expected profits.

Meanwhile, BIPL Securities expects HCAR’s profits for 9MMY19 to decline hugely by 45.8% YoY due to higher input costs and decline in other-income.

In line with these projections, Mr. Arsalan Ali Gondal at Next Capital says that the expected decline in bottom-line on quarterly basis is due to 1) lowest localization ratio causing a corrosion in margins 2) lesser deliveries during the quarter owing to prolonged factory shutdown for annual maintenance during Dec. ‘18, and 3) higher interest rates (high sensitivity due to higher urban sales).

Copyright Mettis Link News

Posted on: 2019-01-23T16:08:00+05:00

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