Honda Pakistan’s Net Profit Jumps to Rs. 1.7 Billion in Q4 FY25

Honda Atlas Cars Pakistan Limited (PSX: HCAR) reported a 23 percent year-on-year rise in net profit for the fourth quarter of FY25 (4QMY25), reaching Rs. 1.7 billion (EPS: Rs. 11.78), compared to Rs. 1.4 billion (EPS: Rs.  9.60) in the same quarter last year. According to AKD Securities, this was aided by improved margins from lower CRC/HRC steel prices and a tax reversal during the period. Revenue for the quarter rose 11 percent to Rs. 27.7 billion, primarily due to higher volumetric sales. The company sold 5,653 units in 4QMY25, up from 5,044 units in the same period last year. Gross margins expanded to 10.1 percent, from 8.4 percent a year earlier, supported by a 15.1 percent year-on-year drop in steel input costs and a shift in sales mix towards Civic models. Administrative and distribution expenses surged 42 percent year-on-year to Rs. 1.1 billion, attributed to increased promotional spending. Other income climbed 125 percent to Rs. 370 million, driven by a 4.7x jump in short-term investments. The company reported cash and equivalents of Rs. 5.6 billion as of March 2025. Finance costs dropped 43 percent to Rs. 346 million, reflecting lower interest rates and reduced short-term borrowing due to improved liquidity. For the full fiscal year, Honda’s profit stood at Rs. 2.7 billion, down 16 percent from Rs. 3.2 billion last year. Annual revenue rose 42 percent to Rs. 78.1 billion, while gross margins improved to 8.5 percent from 8.2 percent. The board announced a final cash dividend of Rs. 8.0 per share. AKD Securities has maintained a ‘Buy’ rating on the stock with a December 2025 target price of Rs. 426 per share, citing improved gross margins and higher volumes. However, it cautioned that potential tariff rationalization in the upcoming budget could compress margins if price parity narrows between imported and locally assembled vehicles.