Honda Pakistan Profit FY25 Surges 23% in Q4

In a significant turnaround, Honda Atlas Cars Pakistan Limited (PSX: HCAR) has posted a robust 23% year-on-year increase in net profit for the fourth quarter of FY25, reaching Rs. 1.7 billion. This impressive performance marks a pivotal moment in the local auto industry, especially under the keyword spotlight of Honda Pakistan profit FY25, reflecting resilience in a challenging economic landscape.

According to a report from AKD Securities, the auto giant’s profit growth is primarily attributed to improved gross margins, a favorable tax reversal, and smarter cost controls. A key contributor was the sharp decline in Cold Rolled and Hot Rolled Coil (CRC/HRC) steel prices, which helped widen gross margins from 8.4% to 10.1%. Additionally, a strategic push toward higher-margin Civic models played a vital role in enhancing profitability.

Quarterly revenues climbed 11% YoY to Rs. 27.7 billion, fueled by a solid uptick in volumetric sales. Honda Pakistan sold 5,653 vehicles during Q4FY25, compared to 5,044 units in the same quarter of the previous year. Earnings per share (EPS) also saw an uptick, rising from Rs. 9.60 to Rs. 11.78.

On the operational front, Honda’s cost structure showed mixed signals. While finance costs fell 43% to Rs. 346 million due to lower interest rates and reduced reliance on borrowing, administrative and distribution expenses spiked by 42% to Rs. 1.1 billion, largely due to intensified marketing efforts.

The company’s liquidity position remains strong, with cash reserves reaching Rs. 5.6 billion by March 2025. Meanwhile, other income more than doubled to Rs. 370 million, supported by a 4.7x increase in short-term investments.

For the full fiscal year, Honda Pakistan reported a net profit of Rs. 2.7 billion—down 16% from last year’s Rs. 3.2 billion—despite a substantial 42% increase in annual revenue to Rs. 78.1 billion. The board has announced a final cash dividend of Rs. 8.00 per share, reaffirming investor confidence.

Looking ahead, AKD Securities has maintained a bullish outlook with a ‘Buy’ rating and a target price of Rs. 426 per share by December 2025. However, potential tariff changes in the upcoming federal budget could challenge future margins by narrowing the price difference between imported and locally assembled vehicles.

Overall, the Honda Pakistan profit FY25 story highlights a strategic and well-managed recovery, offering renewed hope for Pakistan’s auto sector amid ongoing economic uncertainties.

Afsheen Gohar

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