By Honda Atlas Cars (Pakistan) Limited (HCAR) has delivered an impressive financial turnaround in its latest results for the nine-month period of Market Year 2026 (9M MY26), reflecting a strong recovery in Pakistan’s auto sector. The period, which runs from April to March for Honda Atlas, highlights the company’s growing momentum following strategic product launches and improving market conditions.
According to the financial report, profit after tax surged to PKR 2.22 billion, marking a 117% year-on-year increase compared to PKR 1.02 billion recorded during the same period last year. This sharp rise underscores renewed consumer demand and successful portfolio expansion, particularly in fuel-efficient and hybrid vehicles.
New Model Launches Drive Sales Growth
Honda Atlas’ recovery has been largely fueled by the launch of two key models targeting evolving consumer preferences. The Honda HR-V Hybrid, introduced in August 2025, has tapped into Pakistan’s growing demand for fuel-efficient crossovers amid rising fuel prices. Hybrid technology has become a critical differentiator in the local market, allowing Honda to regain competitiveness in the compact SUV segment.
Meanwhile, the Honda City 1.5L Aspire S CVT, launched in September 2025, has revitalized interest in the sedan category. The model’s improved features and automatic transmission option helped attract both first-time buyers and upgrading customers, contributing to higher sales volumes.
Margins Stable Despite Cost Pressures
Despite rising operational challenges, Honda Atlas managed to keep its gross margins stable at 7.9%. A key contributor was the strengthening of the Pakistani Rupee against the Japanese Yen, which reduced import-related costs and provided relief on the cost of completely knocked-down (CKD) parts.
However, the company significantly increased its distribution and marketing expenses, which tripled year-on-year due to aggressive nationwide promotional campaigns for the newly launched models.
Debt and Taxation Remain Key Challenges
To sustain operations and support higher sales volumes, Honda Atlas increased its borrowings, pushing total debt to PKR 14.3 billion. As a result, finance costs surged by 157%, putting pressure on net profitability.
Additionally, heavy taxation continues to weigh on the automotive sector. Honda Atlas reported an effective tax rate of 43.1% during the quarter, limiting earnings retention despite strong operating performance.
EPS Doubles, Outlook Cautiously Optimistic
Despite these challenges, earnings per share (EPS) doubled to PKR 15.59, reflecting growing confidence among investors and shareholders. Honda Atlas’ strategic shift toward hybrid technology has clearly paid off, restoring profitability and market relevance.
Going forward, the company’s ability to manage high finance costs and navigate heavy taxation will be critical in sustaining this recovery. If macroeconomic stability continues and hybrid demand remains strong, Honda Atlas appears well-positioned to maintain its upward trajectory in the coming months.
