HCAR’s profit surges 3.95x in 3QMY25
MG News | January 22, 2025 at 04:36 PM GMT+05:00
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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