Honda Atlas Cars Pakistan Limited (HCAR) reported profit after tax of Rs3.23 billion for MY26, translating into earnings per share (EPS) of Rs22.64, marking a 19 percent increase year on year as improved sales volumes supported overall earnings growth.
Despite the stronger annual performance, the company’s fourth-quarter profitability declined sharply. HCAR posted net profit of Rs1.0 billion in 4QMY26 with EPS of Rs7.05, compared with Rs1.68 billion and EPS of Rs11.78 in the same quarter last year, reflecting a 40 percent drop mainly due to thinner margins and significantly higher finance costs.
Quarterly revenue rose 35 percent year on year to Rs37.3 billion, driven by a 43 percent increase in vehicle sales to 8,058 units. Higher demand, including contributions from newer model variants, helped lift volumes, though earnings remained below expectations because of cost pressures.
Gross margins narrowed to 7.5 percent during the quarter from 10.1 percent a year earlier as higher input costs, the impact of the carbon levy introduced in July 2025, and a shift toward lower-priced variants weighed on profitability. Operating expenses increased alongside sales activity, reaching approximately Rs1.3 billion, reflecting higher distribution and administrative spending.
Other income rose sharply by 140 percent year on year to Rs890 million, supported by higher unwinding of trade debt discounts. However, finance costs surged 170 percent to Rs936 million, offsetting much of the benefit from stronger revenues. The effective tax rate stood at 22.7 percent during the quarter.
For the full year, net sales climbed 57 percent to Rs122.3 billion, while gross profit expanded 42 percent to Rs9.48 billion. Annual vehicle sales grew strongly, driving higher distribution and administrative expenses, while finance costs for the year increased 93 percent to about Rs2.0 billion.
Alongside the results, the company announced a final cash dividend of Rs9.0 per share. Analysts noted that while demand recovery supported topline growth during MY26, rising financing charges and compressed margins remained key challenges for profitability going forward.
