Honda Pakistan’s Profit Soars ~295%, Driven by Strong Auto Sales

Honda Atlas Cars Pakistan Limited reported an astounding profit after tax of Rs 566 million for the quarter ended December 31, 2024, marking a 295% year-on-year increase compared to Rs 143 million in the same quarter last year. The company’s earnings per share (EPS) jumped to Rs 3.97, up sharply from just Re 1 previously.

This sharp acceleration in earnings was fueled primarily by a 44% rise in net revenue, which grew to Rs 17.85 billion, up from Rs 12.43 billion in Q2 FY24. Meanwhile, the cost of sales also increased—by around 42% to Rs 16.2 billion—but the surge in topline allowed gross profit to climb by nearly 60%, to Rs 1.64 billion. Importantly, gross margins expanded to 9.2%, up from 8.3% a year earlier.

In addition to the revenue-driven performance, administrative and marketing expenses rose moderately—by roughly 15%—but this was offset by a dramatic drop in finance costs, which fell by more than half (52%), helping lift the profit before tax sharply. Profit before tax increased nearly 387% YoY, reaching approximately Rs 1.1 billion.

This stellar quarterly result aligns with broader trends in the auto sector, where vehicle sales surged by 69% in December 2024, reaching nearly 9,820 units—where Honda City models featured prominently.

Analysts attribute Honda’s turnaround to a combination of strong consumer demand, normalized production and supply chains, and market positioning. Despite broader economic challenges, the company managed to balance rising costs with uplift in volumes and better margins.

Industry watchers suggest that a pending large-scale institutional sale—reportedly around 1,010 Honda City vehicles to government authorities—could further boost volumes and earnings in coming quarters, though the deal remains under discussion.

In summary, Honda Atlas Cars’ extraordinary profit jump of nearly 295% in Q2 FY25 underscores not only its operational resilience, but also a resurgent auto market in Pakistan. As sales rebound and cost efficiency continues to improve, the company appears well-positioned for sustained growth in the year ahead.