Islamabad, May 22, 2025: Honda Atlas Cars Pakistan Limited (PSX: HCAR) has made a strong comeback in Q4 FY25, clocking a remarkable 23% year-on-year surge in net profit, reaching Rs. 1.7 billion.
The auto giant’s performance reflects a blend of smarter cost management, shifting market trends, and a boost in sales volume. The primary keyword Honda Pakistan profit FY25 signals a critical turning point for the local auto industry navigating turbulent economic conditions.
According to a report by AKD Securities, the company’s quarterly profit growth was largely fueled by improved gross margins, thanks to a sharp drop in Cold Rolled and Hot Rolled Coil (CRC/HRC) steel prices and a notable tax reversal during the period. Earnings per share (EPS) rose to Rs. 11.78 from Rs. 9.60 a year ago.
Revenue for the fourth quarter jumped 11% to Rs. 27.7 billion, underpinned by a healthy increase in volumetric sales. Honda Pakistan sold 5,653 units in 4QFY25—an uptick from 5,044 units sold in the same quarter last year.
Gross margins widened significantly from 8.4% to 10.1%, driven by a 15.1% reduction in steel input costs and a strategic shift towards higher-margin Civic models.
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However, it wasn’t all smooth sailing. Administrative and distribution expenses soared by 42% YoY to Rs. 1.1 billion, mainly due to aggressive promotional activities.
Meanwhile, other income skyrocketed by 125% to Rs. 370 million, supported by a 4.7-fold increase in short-term investments. The company’s cash reserves stood at Rs. 5.6 billion by March 2025, strengthening its liquidity position.
Finance costs fell 43% to Rs. 346 million, thanks to declining interest rates and reduced reliance on short-term borrowing—yet another reflection of Honda’s stronger financial footing.
Zooming out to the full fiscal year, Honda Pakistan reported a net profit of Rs. 2.7 billion, a 16% dip from the previous year’s Rs. 3.2 billion. Despite this drop, annual revenues climbed a healthy 42% to Rs. 78.1 billion, while gross margins edged up from 8.2% to 8.5%, reflecting improved operational efficiency.
The board of directors announced a final cash dividend of Rs. 8.00 per share, signaling investor confidence despite year-round challenges.
Market Reaction and Outlook:
AKD Securities has reiterated its ‘Buy’ rating for Honda Pakistan, setting a target price of Rs. 426 per share by December 2025. The bullish stance hinges on improved gross margins and rising vehicle volumes.
However, analysts remain cautious about the potential impact of tariff rationalization in the upcoming federal budget. A narrowing price gap between imported and locally assembled vehicles could put pressure on profitability.
