HCAR profitability soars to Rs1.87bn in 1HMY21

November 18, 2021 (MLN): Honda Atlas Cars Ltd. (HCAR) wrapped up its half-year financial accounts witnessing a massive increment of Rs1.72 billion in net profits from Rs145.85 million (EPS: Rs1.02) in 1HMY20 to Rs1.87bn (EPS: 13.08) in 1HMY21,  accounts shared by the company on Wednesday showed.

This splendid growth in net earnings is attributable to the volumetric sales, FED reduction in Budget FY22, dissipating supply chain issues, and increase in CBU units, a report by foundation securities noted. 

During the period under review, the topline went up by 77% YoY to Rs47.74bn in 1HMY21 against Rs26.94bn in 1HMY20 owing to attractive financing rates. Despite a substantial increase in the cost of sales, this jump in sales expanded the gross margin from 5.36% to 7.08%.

On the cost side, the administrative expenses surged by 48.3% YoY to stand at Rs503.58m while the distribution and marketing expenses increased by 4.19% YoY during the period due to higher sales volume and increase in freight charges.

The other income of the company sharply raised by around 5.4x YoY to stand at Rs851mn. This increase is primarily attributable to the higher advances from customers and high delivery time for HCAR’s vehicles.

Owing to the lower tax regime, the finance cost declined by 63% YoY to clock in at Rs39.54mn during 1HMY21. 

On the taxation front, HCAR booked a tax expense of Rs943mn, up by around 79% YoY in the same period last year.

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