HCAR’s profit surges 3.95x in 3QMY25

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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