Honda Atlas Cars (Pakistan) Limited (HCAR) announced its financial results for the first quarter of MY26, posting a profit after tax (PAT) of Rs. 828 million (earnings per share: Rs. 5.80). This represents a remarkable year-on-year (YoY) increase of 4.1 times (310%) compared to a profit of Rs. 202.6 million in the same period last year.

Sales and Volume Growth
Net sales for 1QMY26 reached Rs. 26,462 million, a 66% YoY increase from Rs. 15,970 million in 1QMY25. According to Arif Habib Limited (AHL), this growth was primarily driven by a 5.5 times surge in sales volumes, with 5,682 units sold during the quarter. This included 5,154 units of Civic and City models and 366 units of BR-V and HR-V models.

On a quarter-on-quarter (QoQ) basis, however, net sales declined by 4%, attributed to a 3% reduction in volumes due to a high base and stronger sales in January.

Improved Margins and Costs
Gross margins improved to 8.6% in 1QMY26, up from 6.33% in 1QMY25, supported by a decline in CRC prices. However, margins were lower than the 10.1% recorded in 4QMY25.

Distribution expenses rose by 35% YoY to Rs. 350 million, reflecting higher sales volumes, but declined 36% QoQ. Administrative expenses increased by 54% YoY but remained flat QoQ.

Other Income and Finance Costs
Other income surged by 61% YoY and 49% QoQ to Rs. 553 million, while finance costs declined by 29% YoY due to reduced total debt and lower financing rates.

Taxation
The effective tax rate for 1QMY26 stood at 43.29%, slightly lower than the 47.14% recorded in 1QMY25.