HCAR’s profit surges 3.95x in 3QMY25

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MG News | January 22, 2025 at 04:36 PM GMT+05:00

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January 22, 2025 (MLN): Honda Atlas Car Pakistan (PSX: HCAR) announced its 3QMY25 result today, where the company recorded a profit of Rs566 million (EPS of Rs3.97), up 3.95x YoY.

The earnings jump in the 3QMY25 is due to higher gross margins of 9.2% compared to our expectations of 8.3%.

These 3QMY25 gross margins are also higher than the 8.3% recorded in 3QMY24.

Additionally, distribution expenses saw a significant decline of 20% YoY to Rs147mn, while other operating expenses dropped sharply by 72% YoY to Rs17mn, further contributing to the rise in earnings.

This is primarily because of a substantial decline in overall inflation.

This takes 9MMY25 earnings to Rs1.03bn (EPS of Rs7.19) compared to 9MMY24 profit of Rs964mn (EPS of Rs6.75), up 7% YoY.

Net sales rose by 44% YoY to Rs17.8bn in 3QMY25, driven by an increase in units sold to 3,736 units in 3QMY25 compared to 2,374 units in 3QMFY24.

Administrative expenses increased by 15% YoY to Rs457mn in 3QMY25.

Other income fell by 34% YoY to Rs190mn in 3QMY25.

We believe this decline is due to shorter delivery times for cars.

The effective tax rate stood at 49% for 3QMY25, compared to 37% in 3QMY24.

HCAR is currently trading at MY25E and MY26F PE of 26.35x and 14.38x with dividend yields of 2% and 3% respectively.

Financial Results for the quarter ended December 31, 2024 (Rupees in '000)
  Dec-24 Dec-23  % change 
Sales     17,845,429        12,426,171 43.61%
Cost of sales    (16,202,475)      (11,400,180) 42.12%
Gross profit       1,642,954          1,025,991 60.13%
Distribution and marketing costs         (146,963)           (182,641) -19.53%
Administrative expenses         (457,334)           (398,380) 14.80%
Other income          189,942             288,192 -34.09%
Other expenses           (17,396)             (62,509) -72.17%
Finance cost         (214,923)           (443,266) -51.51%
Profit before levy and taxation          996,280             227,387 338.14%
Levy          109,007  -  -
Profit before taxation       1,105,287             227,387 386.08%
Taxation         (538,884)             (84,136) 540.5%
Profit for the period          566,403             143,251 295.4%
Earnings per share           3.97             1.00 -

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