Pakistan’s listed automobile sector is projected to record a 6 percent decline in profitability during the latest quarter despite a strong recovery in vehicle sales, according to estimates released by Topline Research.
The brokerage house expects total sector earnings to reach approximately Rs 14.9 billion in 3QFY26, down from Rs 15.9 billion reported in the same quarter last year, indicating weaker year-on-year profitability.
On a quarterly basis, however, earnings are forecast to improve by around 14 percent, largely driven by seasonal buying trends. Consumers typically postpone vehicle purchases toward year-end to secure newer registration model years in January, resulting in stronger sales momentum in the following quarter.
Net sales across the sector are estimated to grow significantly, rising 29 percent year-on-year and 22 percent quarter-on-quarter to Rs 177.9 billion, supported by higher production and improving demand conditions.
Overall industry volumes are expected to climb 34 percent annually and 11 percent sequentially, reaching nearly 30,939 units during 3QFY26. Excluding Millat Tractors Limited, passenger car sales for Indus Motor Company, Honda Atlas Cars Pakistan Limited, and Pak Suzuki Motor Company Limited are projected to increase 26 percent year-on-year and 41 percent quarter-on-quarter.
Among individual manufacturers, Indus Motor Company’s earnings are estimated at Rs 79.28 per share, while Pak Suzuki Motor Company Limited is expected to post earnings of Rs 94.73 per share.
Atlas Honda Limited is likely to retain its dominance in the motorcycle segment, with sales projected at 435,518 units, reflecting a 32 percent annual increase and a 3 percent rise compared to the previous quarter.
Despite improving sales volumes, sector profitability margins are expected to weaken. Gross margins are projected to decline to 19.36 percent, compared with 21.98 percent a year earlier, mainly due to a shift toward lower-margin vehicle variants and rising cost pressures, including the impact of the carbon levy.
